Encouraged by the UK government’s call to step up lending and revive the struggling economy, Tesco PLC is giving shape to its ambitious plans by further expanding its services into banking – reported Wall Street Journal.
The UK-based retailer is reported to have been hired more than 800 employees for its latest financial-services customer-service center. At present, the firm is offering financial services online and over the phone. Through its Tesco Personal Finance division, it provides loans, credit cards and savings accounts and is looking to eat into the market share of some of the nation’s largest banks, as customers are finding it difficult to get credit. By offering retail banking services, Tesco aims to earn an annual profit of GBP1 billion over the next few years.
Andrew Higginson, chief executive of Tesco Retailing Services, said: The new customer-service center in Glasgow which is due to open in the first half of next year, is a significant step toward a full banking service. It could eventually offer products like mortgages and current accounts.
However, when compared to Lloyds Banking Group that employs about 140,000 staff and handles approximately 30 million customers, Tesco has 400 staff and six million customers. Against this backdrop, Clive Black, an analyst at Shore Capital, said: Investors following Tesco shouldn’t get too carried away on how quickly it can deliver growth. Tesco Bank has excellent prospects and it’s a very exciting time for the company, but it does have to create a bank from scratch and this is another step to building that capability, reported the Daily Mail.
