Tesco to enter mortgage market this year
Supermarket giant Tesco plans to launch a range of mortgages this year despite a lacklustre performance in the UK.
Although Tesco has yet to reveal any further details about the exact launch date or specific products, the banking division says it remains on track for a launch this summer.
Of course, we can only speculate about what this move will mean for customers but Tesco could certainly shake up the mortgage market if it offers eye-catching rates.
Last year Tesco first announced plans to offer mortgages and the bank said it had built up a deposit base ahead of its planned mortgage launch.
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It also said its other personal finance products have grown in popularity. According to preliminary results for 2010/2011 the number of active credit cards has grown by 11%, personal loans by 17% and motor insurance by 8%. It also pointed out that its Fixed Rate Saver product ended the year with a balance of £397 million – 40% higher than planned.
Although Tesco’s group sales were up 8.1% in the period ending 26 February, like-for-like sales in the UK fell by 0.7%. In contrast, Tesco saw growth of almost 30% in Asia.
Banks lose payment protection battle
British banks could be forced to pay out billions of pounds to customers following a High Court ruling over the mis-selling of Payment Protection Insurance.
Following this decision, customers who believe they were mis-sold PPI before new rules came into effect last year will be able to file for compensation. Bank could end up paying an estimated £4.5 billion to customers who were mis-sold this product.
Oliver Morgans, financial services expert at Consumer Focus, said: ‘This is a huge win for the millions of people mis-sold PPI. It has taken years of the banks being dragged kicking and screaming, but they are finally being forced to do the right thing by their customers.’
However, the British Bankers’ Association commented: ‘We are disappointed with today's judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal.’
Payment Protection Insurance is sold to customers taking out loans or credit and is the subject of more complaints than any other financial product.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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