From This is Money:
Senior Tesco executive Andrew Higginson told the Financial Times that wholesale funding would let Tesco Personal Finance (TPF) speed up growing a mortgage business.
But Tesco will not pursue the risky strategy that led to the demise of Northern Rock, which was heavily dependent on the money markets and hit by the credit crunch.
Higginson, chief executive of Tesco’s retailing services arm, which includes TPF, told the FT: ‘We are very much moving towards being a standalone bank. If you’re going to build a sizeable [mortgage] book, you would have to think about wholesale funding.’
Tesco Personal Finance, which bought out Royal Bank of Scotland’s 50% stake in the then joint venture for £950m last year, would remain part of the supermarket chain and not be separately listed on the stock market.
The bank has substantially grown its savings business over the past year, with deposits rising from £2.5bn last October to £4.5bn today, thanks to its perception as a s…