The Acquisition will enable Tesco over time to extend its financial services business from a collection of popular financial products to that of a full service retail bank offering more choice to customers.
The Acquisition is part of the strategy by Tesco, Britain’s largest retailer, to grow its share in fast growing services markets including financial services. Tesco believes such services could deliver £1 billion in profits per annum.
Tesco CEO Sir Terry Leahy, commented,“Services are bigger and faster-growing markets than food. As consumers look to make every pound work harder, it is a good time for Tesco to expand its presence”.
Tesco has plans for the future development of TPF, which will include an increased presence in Tesco’s traditional stores, a wider range of savings products and, possibly in the future, a current account product.
It would however appear that Tesco may stop short of moving into the mortgage market at this time.
