Tesco to open 30 'bank branches' this year

Tesco to open 30 'bank branches' this year

UK supermarket chain Tesco plans to open 30 bank branches in its stores by the end of 2009 as it looks to cash in on consumer mistrust of traditional banks and extend its presence in financial services.

Tesco - which bought out the Royal Bank of Scotland to take complete control of Tesco Personal Finance in December - has been running a trial of the concept branch in Glasgow since 2006. The first new branches will open next month in Blackpool, Coventry and Bristol.

Each branch will offer the existing range of Tesco Personal Finance products such as insurance, credit cards and savings account, alongside ATMs and a dedicated TescoCompare terminal for price comparison purposes.

In March, the group announced plans to create 200 new banking jobs as it relocates its existing 250 personal finance staff to new headquarters in Edinburgh. It is currently setting up an IT infrastructure that will enable it to offer standard current account products within the next 18 months.

Andy Higginson, chief executive of Tesco Retailing Services, says the supermarket bank will be "old-fashioned and conservative".

"Some banks have grown up using practices that are the opposite of Tesco: we encourage customer loyalty, but many banks punish loyalty. Ours is a different philosophy," he says. "The markets have become far more rational. Some banking businesses have got into trouble for growing too fast and doing daft things."

Tesco claims to have seen customer deposits double over recent months as risk averse consumers take flight from the crisis-stricken traditional banking sector.

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