Tesco plans to enter banking biz

Tesco plans to enter banking biz

London: Leading retail chain Tesco is planning to get into the banking business by offering current accounts and mortgages to consumers, a media report said on Wednesday.

Meanwhile, the British retailer has reported a 11.3% jump in group profit before tax at £1,435 million for the 26 weeks ended 23 August, 2008, compared with the same period a year ago.

“Tesco plans to wade into the banking business, offering current accounts and mortgages to consumers disillusioned with the traditional providers," UK daily The Guardian has reported.

Quoting the retailer, the report said consumers were seeking a safe haven for their cash and banking crisis presented it as an opportunity.

Further, Tesco’s Chief Executive Sir Terry Leahy called on the banks to get back to the business of lending money.

“Sales from the group’s international stores - from Ireland to Turkey, Thailand and China - were up 27%, and trading profit rose 28% to £346 million, excluding a 60 m anticipated loss from the US Fresh & Easy chain," it added.

Quoting Tesco, the daily said it had seen the number of applications for savings accounts double in recent days as people searched for a safe home for their money.

The Guardian attributing to Andrew Higginson, the group’s finance director who is to take over as chief executive of the banking arm, said Tesco could cash in on its reputation.