Tesco Bank
 | |
| Company type | Private |
|---|---|
| Industry | Finance and insurance |
| Predecessor | Tesco Personal Finance |
| Founded | 1997 |
| Headquarters | , |
Key people | Benny Higgins CEO |
| Products | Consumer financial services |
| Total assets | £8.156 billion (31 December 2007) |
Number of employees | 200 at head office (2008) |
| Parent | 100% Tesco |
| Subsidiaries | Tesco Compare |
| Website | tescobank.com |
| Footnotes / references Tesco purchase of RBS stake completed 2008Q4 | |
Tesco Bank is the trading name of Tesco Personal Finance plc, a telephone and internet based commercial bank in the United Kingdom owned by Tesco, the UK's largest supermarket. Until 2008 it was a 50:50 joint venture between Tesco and the Royal Bank of Scotland, one the UK's largest banks. It is registered in Scotland at St. Andrew's Square, Edinburgh.
History
Formation of Tesco Personal Finance
Prior to the formation of TPF, Tesco had a banking joint venture with NatWest, which ended in February 1997. Tesco Personal Finance was formed in July 1997 following the successful launch of Sainsbury's Bank by its main UK competitor, J Sainsbury plc Sainsbury's. The bank was launched as a joint venture with the Royal Bank of Scotland, which processed all its financial transactions. Subsidiary companies of the Royal Bank, such as Direct Line, UKI and Lombard Direct helped Tesco Personal Finance provide insurance products.
Tesco Personal Finance has been a great success for both Tesco and the Royal Bank of Scotland, returning profits of £65 million for Tesco for the financial year to February 2007. Tesco is able to use its large customer base to cross sell financial services products, and allows customers to accumulate Tesco Clubcard points when they purchase finance products. This strategy is highly effective because it can be combined with in store offers which results in customers spending higher amounts of money, often on non-food items inorder to increase sales across all product lines thus causing sustainable yet competitive growth which allows them to deal with control for market control with ASDA.
The company is currently trialling a finance centre in the Glasgow Silverburn Extra store providing free financial advice and quotes for insurance and loans, this service is staffed by trained Royal Bank of Scotland staff. The centre also has a Euro cash machine providing commission free Euros and a Bureau de Change run by Travelex. If successful this trial will roll out to a number of other key and flagship stores.
Name change to Tesco Bank
In July 2008, Tesco announced that they were buying out the Royal Bank of Scotland's 50% stake in the company for £950 million, and the transaction was completed later that year.[1][2]
During 2009 Tesco plan to open 30 branches in store, branded Tesco Bank. The products have always been promoted in store with posters and leaflets (the low cost of advertising in existing premises is one competitive advantages of a retailer-owned financial services company), but these direct customers to contact Tesco Financial Services by post, phone or via the internet.[3]
In October 2009 Tesco Financial Services was renamed Tesco Bank.[4] The company is adding mortgages and current accounts to its product range.
References
- ^ "Tesco is taking full control of Tesco Personal Finance, after paying Royal Bank of Scotland £950m for its 50% stake in the division". Sky News. 2008-07-28. Retrieved 2008-07-28.
- ^ "Tesco eyes mortgages and current accounts in plan to take on UK's high street banks". The Telegraph. 2008-07-28. Retrieved 2008-07-28.
- ^ Bradshaw, Tim (2009-03-29), "Tesco to open bank branches in its stores", Financial Times, London, retrieved 2009-03-29
{{citation}}: Check date values in:|date=(help) - ^ "Tesco Bank to offer current accounts and mortgages". The Telegraph. 2009-10-06. Retrieved 2009-10-06.