By Mark Potter
LONDON (Reuters) - Tesco
The supermarket group said on Friday, the second day of presentations to investors about its ambition to grow in retail services, that Fiserv would help it to make the leap from a collection of financial products to a full-service bank.
Tesco bought Royal Bank of Scotland
It has since gone on a staff recruitment drive, started testing bank branches within stores and signed an insurance deal with Fortis
In presentation slides on its Web site, Tesco said it has 6 million customer accounts, with its credit card business growing at an annual rate of about 10 percent, personal loans growing at 19 percent and instant access savings accounts at 28 percent.
Transactions at its travel money business are up over 100 percent, it added.
The group said its banking business would initially target its most loyal shoppers -- the 15 million members of its Clubcard loyalty scheme.
Just 10 percent of Clubcard holders have a Tesco credit card, currently its biggest financial business, while only 4.2 percent have Tesco car insurance and 2.2 percent a Tesco savings product, it said.
Some analysts have speculated whether it might be interested in buying assets from bailed-out banks like Lloyds
However, Tesco Bank chief executive Benny Higgins said on Tuesday he was focussing on organic growth, with plans to introduce a Tesco current account and possibly also mortgages over the next couple of years.
Presentation slides from banking commercial director David McCreadie said it would take time to develop the right proposition on current accounts.
Expansion into mortgages would also require the development of a broader source of funding for the bank, he noted.
Tesco said on Thursday it was also aiming to build a telecoms business generating 2 billion pounds a year of sales over the medium term.
The world's third-biggest retailer, which has around 30 percent of Britain's grocery market, is looking to retail services along with international expansion as a way of generating new, and often more profitable, revenue streams.
At 12:40 p.m., its shares were down 1.1 percent at 420.5 pence, in line with the DJ Stoxx European retail index <.SXRP>.
Fiserv provides information management and electronic commerce systems for the financial services industry.
($1=.6002 Pound)
(Editing by Jon Loades-Carter)
(c) Reuters 2012. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
