Tesco Personal Finance
Encyclopedia
Tesco Bank is the trading name of Tesco Personal Finance plc, a telephone and internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

 based commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

 in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 owned by Tesco
Tesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...

, the UK's largest supermarket
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...

. Until 2008 it was a 50:50 joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...

 between Tesco and the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...

, one of the UK's largest banks and remained under the Tesco Personal Finance plc (TPF) branding until 2010. Customers will gradually notice the phasing out of the TPF brand until mid to late 2011 when the rebranding will be complete. It is registered in Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...

 at St Andrew Square, Edinburgh
Edinburgh
Edinburgh is the capital city of Scotland, the second largest city in Scotland, and the eighth most populous in the United Kingdom. The City of Edinburgh Council governs one of Scotland's 32 local government council areas. The council area includes urban Edinburgh and a rural area...

.

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
Sainsbury's Bank
Sainsbury's Bank, now trading as Sainsbury's Finance, is a 50:50 joint venture between J Sainsbury and Bank of Scotland . Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997...

 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 in order to increase sales across all product lines thus causing sustainable yet competitive growth which allows them to deal with competition for market control with ASDA.

Tesco Bank have currently got two Tesco Bank in-store branches in Coventry Tesco Extra and West Durrington Tesco Extra. The centre also has a Euro cash machine providing commission free Euros and a Bureau de Change
Bureau de Change
A bureau de change or currency exchange is a business whose customers exchange one currency for another. Although originally French, the term bureau de change is widely used throughout Europe, and European travellers can usually easily identify these facilities when in other European countries...

 run by Travelex
Travelex Group
Travelex Group is foreign exchange company founded by Lloyd Dorfman and headquartered London. Its main businesses are international payments, bureau de change and issuing prepaid credit cards for use by travellers...

. 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 £
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

950 million, and the transaction was completed later that year.

During 2009 Tesco plan to open 30 branches, 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.

In October 2009 Tesco Financial Services was renamed Tesco Bank. The company is adding mortgages and current accounts to its product range.

In July 2010 Tesco Bank opened a major facility at Quorum Business Park
Quorum Business Park
Quorum Business Park in North Newcastle is currently the largest speculative office development in the UK outside Central London, with almost one million square feet of office space built or under construction...

in Newcastle.

External links

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