Tesco Bank will offer mortgages and enable customers to
earn loyalty points on repayments through the Tesco
Clubcard.
Customers who have the UK supermarket giant’s
loyalty card will be rewarded with points as they repay their
mortgage each month, collecting one point for every £4.
Go deeper with GlobalData
According to Benny Higgins, chief executive of
Tesco Bank, entering the mortgage market is a “significant step in
broadening the products” that the UK retail giant offers its
customers.
Tesco Bank is offering home loans to customers
with deposits of 20% or more, and a range of fixed rate options and
a two-year base rate tracker are on offer. Tesco is also,
reportedly, planning to use shopping data to assess customers’
suitability for the loans.
Several UK retailers – such as Asda,
Sainsbury,
Marks & Spencer (M&S) – have entered the retail banking
industry and
M&S has even announced the launch of fee based current
accounts by the end of 2012.
Tesco bought out its financial partner RBS in
late 2008 and has been gradually building up into a full-service
lender since. Tesco Bank already has over 6.5m customers.
In June 2011,
Higgins told RBI about penetrating the UK retail
banking market further with the plans of offering mortgages and
current accounts,
but Tesco Bank has delayed its current account launch until
2013.
