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Tesco To Go Solo In Banking After Rbs Buyout

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Tesco, the UK supermarket giant, today announced that it will buy Royal Bank of Scotland's 50 per cent share in Tesco Personal Finance Group (TPF) for £950 million.

The stores company said the deal will allow it to offer "a full service retail bank" to its customers as well as "better returns to shareholders."

Sir Terry Leahy, chief executive of Tesco, said: “Services are bigger and faster-growing markets than food. As consumers look to make every pound work harder, it is a good time for Tesco to expand its presence.

“Tesco’s clear strategy, set out a little over 10 years ago, has created new service businesses attracting around seven million customers. We have become a trusted supplier of innovative products and services offering great value and I believe Tesco’s special relationship with consumers will enable TPF, as a wholly owned subsidiary of Tesco, to move its business to the next level.

Has Sir Terry been reading the Press lately the service sector is starting to contract!!!

So will all of the supermarkets now become banks???

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Just when banks thought it couldn't get any worse, Tesco has decided to make the credit crunch that bit more painful by deciding to turn its full attention to making the grocer a new power in high street banking.

Why make a separate trip to your usual bank when you can do it all while filling your trolley with that week's shop? Meanwhile, for the broadband generation, why not bank and order your groceries from the same website?

The seriousness of Tesco's intent is reflected in the board's decision to move Andy Higginson, the company's most senior executive after Sir Terry Leahy, to run a beefed-up retail services operation that will include banking, telecoms and online shopping. While Higginson gave a pretty laid-back performance to the media yesterday about the bank's plans, you should assume that the supermarket chain has adopted the "under-promise and over deliver" approach to what could be a vast area of new growth for the company.

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  • 399 Brexit, House prices and Summer 2020

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