Money Insurance Utilities Broadband and Mobile Travel So Switch for Business News and Views mobile navigation
You are here: Home > News & Views > Would you bank with Tesco?

Would you bank with Tesco?

Mar 31, 2009

Tesco Tesco is a shopping favourite for many of here in the UK…

But would you use them for banking?

Yes, in a bold move, you will be able to get you a credit card or loan alongside your fruit and veg as Tesco plan to open 30 bank branches in its shops by the end of this year.

There has been a trial in Glasgow since 2006. New branches will open next month in Blackpool, Coventry and Bristol and Tesco hopes that it can capitalise on our newfound distrust of traditional banks.

Tesco already offers credit cards, savings accounts, loans and insurance and plans to start offering current accounts within two years and also offering mortgages in due course. As a Tesco bank customer, you will also be able to accrue loyalty points under its Clubcard programme.

Tesco set up its financial services division as a joint venture with Royal Bank of Scotland 11 years ago and it bought RBS’ stake for £950m in July 2008.

Andy Higginson, the chief executive of Tesco Personal Finance, has said that the move into the mainstream banking business will be based on a conservative, “old-fashioned” approach. The retailer has hired several high-profile executives from the financial services industry to lead its foray into the new business.

Tesco announced earlier in March that the amount of money deposited in its savings accounts had nearly doubled in the last 6 months, with more accounts opened in December 2008 than in the whole of 2007.

It also announced plans to recruit more than 200 staff to work in the Edinburgh headquarters of its personal finance arm.

The move by the Tesco comes as our anger grows over the billions of pounds paid out in bonuses to bankers this year despite some of the biggest banks, including Lloyds and Royal Bank of Scotland, being saved from collapse by taxpayer-funded bailouts.

Banking analysts believe a current account from Tesco could really shake up the banking sector with David Black of financial information provider Defaqto saying:

‘Current accounts are a key product for a bank because they enable them to cross-sell other products very successfully. It usually takes an age to get market share in current accounts but the supermarkets are in an ideal position to do this.’

The reality of across-the-board paid-for current accounts is becoming more likely as the major high street banks face the possibility of no longer being able to charge unauthorised overdraft fees as a result of an ongoing court battle with the Office of Fair Trading.

Claim back your bank penalty charges

Black believes Tesco will be in a prime position to avoid this, saying:

Tesco have the superb situation where they can say they won’t charge if you spend x amount of money in their stores. The high-street banks should be very afraid.’

So, do you think Tesco will make an impact in the banking sector in the year ahead?

And if they do, would you be willing to use them?

- Switch to an Alliance & Leicester Premier Current Account and get £100 cashback

14 Responses to “Would you bank with Tesco?”

  1. Seany Feehan Says:
    Apr 2, 2009 at 12:43 pm

    I’m in favour of this.

    The more competition the better.

    More power to tesco!

  2. Mike Hall Says:
    Apr 2, 2009 at 12:51 pm

    Asda should do the same, I don’t shop at Tesco.
    If ASDA started a bank, I’d join.

  3. Caroline Smith Says:
    Apr 2, 2009 at 1:03 pm

    Tesco’s have successfully provided most of the banking services (savings accounts, insurance, loans etc for the past 10 years). I know, I have my savings with them.
    so they are not newcomers to the market.

    People may not like the Tesco domination in the market place, but you have to appreciate this has not happened overnight, and the people driving this company forward have achieved this arguably prominent position, through hard work, sensible decisions and a good business acumen.

    I’m not sure that the same can be said for our historical banking giants.

    Would I bank with Tesco – absolutely!!

  4. fraz Says:
    Apr 2, 2009 at 1:29 pm

    why not

    i am already a member of co-op bank

    good luck to them especially if they dont have charges like the big banks out there

    fraz

  5. lisa wood Says:
    Apr 2, 2009 at 1:44 pm

    Tesco’s banking is a shambles. I’ve been trying to open an esavings account since January. They couldn’t even get my DOB correct so I can’t access it! To add insult they wanted to almost double my car insurance premium when I moved to a different part of the same town. Now I’ve cancelled it and they want to charge me a month’s fee ON TOP of the months premium I haven’t had the benefit of.

  6. Paul Summerbell Says:
    Apr 2, 2009 at 2:22 pm

    ‘Every little hurts’. The more you let Tesco’s grow the more it will grow to the point when the world will be under a Tesco’s roof. It offers insurance, electricals, groceries and many other services and now banking which will be followed by legal services next year. Tesco’s is responsible for untold misery to farmers and other suppliers and the closure of High Streets up and down the country. It will now be responsible for the losses of ordinary jobs in the High Street banks not the ‘fat cats’ and the closure of any business in the legal field creaming off the most profitable services and discarding those that people need but which do not generate enough profit. When will people learn that there is more to life than the small amount they save as individuals and a far greater saving in ending big business and its dictatrorial approach to our lives. If you need an example examine the credit crunch and you will find big business and greed are the culprits. Exactly the principles you encourage in Tesco’s.

  7. Malcolm Wenborn Says:
    Apr 2, 2009 at 3:00 pm

    Firstly Tesco in not new to banking. Secondary who would you trust Tesco or your high street bank. The banks have proven that they can not manage money. The day of the good old high street bank being prudent have gone. At lest Tesco are financially sound and have a proven track record in managing there business well.

  8. John Lee Says:
    Apr 2, 2009 at 3:05 pm

    Tesco, won’t be the only one the other big supermarket chains (especially ASDA), will be looking into this also, so it won’t be just a Tesco roof. Anyway I say stick it to the banks they have ruled for far too long and it is time to move on. At least Tesco and Asda will keep banking fees down it will be healthy competition. The world is changing so we have to move, the banking system as it is or was is so outdated. I also don’t forget the big rip off with banks a couple of years ago when they charged us to withdraw our own money, at the end of the day banks won’t go away, maybe banks can expand by moving into selling food and clothes!!

  9. Mark @ Money Hospital Says:
    Apr 2, 2009 at 5:01 pm

    Interesting to see the comments!

    It’s true that Tesco is not new to the personal finance market; they’ve been in it for nearly 12 years. However, that was a 50/50 joint venture with RBS – the products were basically Tesco-branded sales for RBS products. What [i]is[/i] new is Tesco’s move towards becoming a ‘proper’ bank – they bought out the RBS stake last year and are about to offer the full service, branches and everything. Tesco chequebook, anyone? :)

  10. beingsalt Says:
    Apr 2, 2009 at 5:04 pm

    paul summerbell’s comment deserves the Pulitzer Prize.

    couldn’t agree more!

  11. Pat Says:
    Apr 2, 2009 at 9:43 pm

    A really good idea.

    At the moment I use my clubcard plus to withdraw what little cash I need or if I need a larger amount use my Savings Card in store

  12. Chris McCabe Says:
    Apr 2, 2009 at 10:11 pm

    No, I’ll stick with my ethical bank, the Co-operative; I’ve never had any problem with them.

  13. beingsalt Says:
    Apr 3, 2009 at 11:06 am

    ditto Chris.

  14. Walton Aaby Says:
    Jul 7, 2011 at 7:26 am

    I am 19 and have passed my car driving licence 2 months ago. The insurance for all the cars I have looked at are way to high. More than £2500.

Leave a Reply

  • (required)
  • (will not be published)