MARKS & Spencer plans to open 50 bank branches in its UK stores within two years as it takes on Tesco and British lenders such as Lloyds and Barclays Bank.
Marks & Spencer will open the first branch at its flagship Marble Arch shop in London in July as part of a joint venture with HSBC.
Customers will be able to open new chequing accounts by the autumn as part of the rebranded offer called M&S Bank, and mortgages are planned.
The move extends M&S Money, which offers car, home and travel insurance, credit cards and foreign currency exchange services online and over the phone.
M&S sold the business to HSBC in 2004 for £762 million (€942 million) to raise cash to help fend off a hostile takeover bid by billionaire Philip Green.
The retailer still receives half of the unit’s profit after some costs.
The amount it received rose to £50.7 million last year.
The stock climbed 8 per cent this year.
A spokeswoman said they have no plans to have bank branches in its Irish stores. M&S Money has more than three million customers and the retailer said its new M&S Bank branches will have a competitive advantage as they will be open for twice as long as traditional banks, including at weekends.
“Clearly there is an opportunity here for Marks & Spencer ; there is a general mistrust with the financial sector and it’s a brand that engenders a lot of trust,” said John Stevenson, an analyst at Peel Hunt.
Mr Stevenson has a hold recommendation.
The move pits the company against Tesco, the UK’s biggest supermarket-based bank, which offers credit cards, savings accounts, loans and insurance.
Tesco reined in plans to offer chequing accounts and mortgages due to difficulties while it puts existing products onto new systems and call-centre platforms following the buying back of Royal Bank of Scotland’s 50 per cent stake in the business.
J Sainsbury also offers some banking products such as home and pet insurance.
“This is our most significant innovation in retail banking since we launched First Direct over 22 years ago,” said Joe Garner, head of HSBC in the UK.
“It should be easy to deliver, and execution should be strong with HSBC’s backing,” Mr Stevenson said.
“Tesco is somewhat behind, whereas M&S is getting in fast with a broad offer.” – (Bloomberg)
