Tesco bank encounters regulatory hurdle
(5th October 2010 – UK) The Financial Services Authority has knocked back Tesco’s plans to build a full service banking operation, after delaying giving the retail chain approval to offer mortgages.
The supermarket has laid out plans to extend its current person finance unit to a full-service retail bank following the re-branding of the unit to Tesco Bank last October.
At the centre of this strategy was the planned introduction of mortgages by the end of the year, to be followed in 2011 by current accounts.
However, in the wake of the global financial crisis the FSA has continued to tighten regulations, meaning Tesco may have to wait up to another year before being given the green light to offer mortgage products, The Observer newspaper reported.
The FSA is just being careful. It is a new process and it is very difficult, Tesco Bank told the Observer.
At the centre of this strategy was the planned introduction of mortgages by the end of the year, to be followed in 2011 by current accounts.
However, in the wake of the global financial crisis the FSA has continued to tighten regulations, meaning Tesco may have to wait up to another year before being given the green light to offer mortgage products, The Observer newspaper reported.
The FSA is just being careful. It is a new process and it is very difficult, Tesco Bank told the Observer.
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