Tesco Finance is understood to be aiming for a full retail bank status, offering the full range of bank products and services to customers.
The 50 percent stake RBS hold in Tesco Finance is to be bought back by Tesco itself, at a cost of GBP950 million. The initial plan appears to be an expansion of the current product range offered, with home insurance the first to receive the extra attention. After that Tesco Finance are expected to start offering basic bank accounts, placing themselves in direct competition with the high street banks.
The position of Tesco Finance, using its core Tesco brand to win customers through supermarket retailing, is a strong one. Most people in the UK use Tesco at some time, so the chance to promote a full bank operation via the stores and online could prove an excellent opportunity.