Tesco to launch mortgages before current accounts

Monday 23rd November 2009

Tesco bank looks set to launch its mortgage range by the end of 2010, well before its current accounts, which it is likely to hold off until 2011, Britain’s biggest retailer said on Friday.

Tesco has brought forward its mortgage plans to replace its planned initial launch of current accounts.

Tesc, which has pledged to be a ‘people’s bank’, denied the changes represented a slippage in its plans to launch a current account – the main banking relationship and crucial to its ambitious financial services plans, according to a story in the Financial Times.

Tesco said: “We have said that we plan over time to extend the financial services business from a collection of successful financial products to that of a full service retail bank offering more choice, innovation and value to customers, and better returns to shareholders.”

It added: “As part of this we are looking at new products and services such as mortgages and current accounts in the coming years. We are currently working hard to put the plans together on these. Alongside the plans we also need to build the systems and infrastructure platforms to enable us to provide these services.”

Tesco’s plans originally included 30 in-store branches by the end of this year, but it now said it plans to offer high street branches and in-store desks. Tesco Bank customers can already carry out transactions at the till.

More in-store branches are expected to open as the financial services products are launched.

Tesco said it will focus on its own customer base for initial sales, particularly the 15m shoppers with a Tesco Clubcard. It said just 10 per cent of Clubcard holders had a Tesco credit card, with 4.2 per cent holding Tesco car insurance, 2.2 per cent having a Tesco savings account and just 1 per cent taking out a Tesco loan.