Business banking to be offered by Tesco Bank

Tesco has declined to bid for Northern Rock and instead is focusing on its own operations - which are to include business banking.

Tesco has announced that its new full-service finance operation will be offering a UK business bank Account in its product portfolio.

Re-branding as Tesco Bank and opting for working out of its supermarket chains rather than opening high street branches, small business banking facilities, mortgages and current accounts will be among the products offered by the financial services provider, the Guardian reported.

Previously operating under the name Tesco Personal Finance, the company already boasts eight per cent of credit cards issued in the UK and 3.8 million customers in its savings and insurance arm.

"Tesco is building a different kind of bank - one that listens to customers, offers simple and transparent products and rewards loyalty," explained chairman of Tesco Bank Andrew Higginson.

This news came after it was announced that the Tesco chain was not going to bid for control of the bailed-out Northern Rock, which is being broken up to create a new range of high street banks.

With a potential of three new banks to appear on our streets, Rowena Mason wrote in the Telegraph of the potential effect this could have on UK business banking.

She explained that although businesses may have more choice in terms of where to put their money, this does not mean that services will necessarily get cheaper.

Ms Mason added: "Smaller banks focused on the nuts and bolts of consumer and business banking are also likely to be less profitable institutions and that may come at the public's cost."

Tesco has been operating as a supermarket bank for the last 12 years and offers 28 different financial products to an existing customer base of close to six million people.

It is the largest bank of its kind in the UK and services can be accessed over the phone, online - with online business banking expected to be on offer, as well as in the supermarket stores.

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