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Tesco grows banking service with 800 new jobs

Last Updated: Thursday, August 20, 2009 - 16:03

London: Britain`s biggest retailer Tesco said Thursday its personal finance unit would open a customer centre in Scotland, creating 800 jobs and bringing the group nearer to providing full banking services.

Tesco Personal Finance (TFP), which provides credit cards, small loans and insurance policies, will open a new centre in Glasgow during the first half of 2010, Tesco said in a statement.
Britain`s biggest supermarket and third largest in the world said the centre would be built with the help of a Scottish government grant worth five million pounds (5.8 million euros, USD 8.3 million dollars).

"This is a strong vote of confidence in Scotland`s financial services industry from one of the UK`s leading companies," Britain`s finance minister Alistair Darling was quoted as saying in the joint statement.

"And it shows that even at this difficult time, the Scottish and wider UK economy is still creating high quality jobs," he added.
Britain remains stuck in recession as the number of unemployed people rises towards three million, while the nation`s banking sector has been shattered by the financial crisis.

As lenders such as Royal Bank of Scotland have fallen into state hands amid the ongoing credit crunch, Tesco has managed to win new customers for the limited financial services it offers.

"The opening of the new customer service centre will be a significant step towards TPF offering a full banking service," said Andrew Higginson, chief executive of Tesco Retailing Services.

Darling, also speaking Thursday on BBC radio, said Tesco`s announcement should be welcomed as Britain`s banking sector needed greater competition.
"The last couple of years has seen a significant reduction in the number of people, both from abroad and British-based banks, who are lending into the market. We need more competition and that`s something that we intend to encourage," he added.

In early trade following Tesco`s announcement, the retailer`s share price rose 1.24 percent to 367.8 pence on London`s FTSE 100 index, which was up nearly one percent to 4,734.46 points.

Tesco recently said it planned to open banking outlets in 30 of its supermarkets by the end of 2009 as it seeks to tap into growing public anger at the crisis-hit traditional banking sector, but won`t be offering home loans.

Meanwhile it has been suggested that Tesco may bid for nationalised bank Northern Rock, which the British government is reportedly considering selling later this year.

Bureau Report

First Published: Thursday, August 20, 2009 - 16:03
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