Welcome to Tesco-bank: Supermarket giant to offer current accounts and mortgages

Tesco is to become a stand alone bank, offering cheap home loans and current accounts alongside credit cards, insurance and savings deals.

The supermarket will go head-to-head with the traditional banks in a bid to grab a share of a £20 billion profit pool from UK customers.

It will operate out of branches within more than 200 Extra stores and also over the internet and telephone both in Britain and other countries where it has stores.
Tesco is promising simple cut-price financial products alongside the shelves of baked beans, washing powder, fruit and veg.

The retail goliath will have to launch a series of market leading 'best buy' deals on home loans, savings and current accounts if it is to grab the public's imagination.

Tesco believes it can tap into customer dissatisfaction with the existing 'big five' High Street banks - HSBC, Lloyds-TSB, RBS/NatWest, Barclays and Halifax Bank of Scotland.

The company says the public will be willing to switch to a Tesco bank because the brand is trusted.

It has set itself a target of making profits of £1 billion a year from the bank and a number of related services, including its shopping website, within five to 10 years.

Tesco has hired Benny Higgins, who ran the retail arm of the UK's biggest mortgage bank, Halifax, to head the banking operation.

Mr Higgins, who left HBoS after just one year at the bank having been head-hunted from RBS, is expected to take an aggressive approach to attracting customers.

The Tesco bank will be part of a new division at the retailer headed by Andrew Higginson, who has been promoted from the job of Finance Director.

Outlining the new bank's plans, he said: 'There is a real appetite for Tesco in this area.

'If you put together simple, easy to understand, relevant products, we feel people will buy them.

'I think the current account is one we will look at very carefully. That is often at the core of people's relationship with their financial service providers.

'There are big opportunites for savings products and mortgages is something we will look at. Mortgages may well be something we offer.'

Mr Higginson said Tesco has an advantage over existing banks which have been criticised for offering complex 'labyrinthine' deals and hidden charges on current accounts.

'We start from a position where we can be more transparent,' he said.

'A lot of it is about giving customers what they really want at a really fair price and treating them well. That is really where Tesco's reputation lies.

'We have a good reputation for simpler, straight-forward, good value products.'

He said the bigger stores will have a 'branch' within them, which will help recruit customers.

Mr Higginson said: 'We have a physical presence through our stores. People come to our stores in large numbers to do their shopping, we have a terrific brand and good knowledge of customers.

'All three of those things we can exploit when it comes to build the bank.'

The decision by Tesco amounts to a major expansion of its existing personal finance business, which has been run in partnership with the Royal Bank of Scotland for 11 years.

It is buying out RBS, which currently owns 50per cent of the finance business, at a cost of £950 million.

Tesco's profits for the last financial year hit £2.8billion. While this is gargantuan in terms of retailers, it is relatively small compared to financial services.

The store's chief executive, Sir Terry Leahy, indicated expanding into this sector could bring a powerful new profit stream.

'Services are bigger and faster-growing markets than food. As consumers look to make every pound work harder, it is a good time for Tesco to expand its presence,' he said.

'With a renewed focus on growth in the UK and internationally, we can unlock the true potential of Tesco's retailing services.'

Tesco admitted that it will take three years before it is a fully functioning bank. It will be six to 12 months before it begins to roll out a range of new products.

The store's banking operation employs around 300 people in Edinburgh, Redhill and Ireland. These workers will keep their jobs, while the company is looking to expand.

Tesco Personal Finance was founded in 1997 and now has more than five million customer accounts. It generated profit before tax of £206 million last year, with the figure expected to exceed £240 million this year.

Businesswomen urged to use loan fund

The economic climate may pose challenges for new business start ups, but women entrepreneurs across the county are being urged to kick-start new ventures with support from a £120,000 loan fund.

The Women's Employment and Enterprise Training Unit (WEETU), based in the city centre, is offering fixed-rate loans to help establish new enterprises and develop existing ones.

It is hope the fund - which has already helped set up and expand 115 Norfolk women's businesses in the past 10 years with loans totalling more than £100,000 - will provide alternative sources of cash to women who have been denied bank loans.

The money is being offered through WEETU's Full Circle programme in which women entrepreneurs join “enterprise circles”, groups of four to six women who provide peer support and mutual encouragement.

About 30 enterprise circles are currently active in Norfolk.

Businesswomen must come up with a business plan for their venture, which must be backed by fellow WEETU circle members, to qualify for loans of £250 to £2,500.

Jeanette Flemons, enterprise support officer at WEETU, said: “There are many women in Norfolk who want to go into business and self-employment but find it difficult to borrow through high street lenders and other traditional routes because they have a poor credit history, for example, or they are not homeowners.

“We want more women to be aware of WEETU's Full Circle loan fund, which can prove invaluable and make all the difference when it comes to getting a business off the ground.

“We're not talking about big businesses. These are more micro-businesses - people who require funding for things like computers, stock, raw materials, transport, cooking or craft equipment, or for attending training courses. We want to hear from women with business ideas and see how we can help them move forward.”

One entrepreneur who has benefited from a WEETU loan is Kate Jackson, who set up educational business the Minimonsters Creepy Crawly Roadshow, in 2004.

Ms Jackson, who lives in Bungay, takes an assortment of insects, arachnids and reptiles around schools in the Norwich area.

Facing a big public liability insurance bill in her first year she got an £850 loan from WEETU to help her through her first year.

She said the money, which she has repaid with interest, and the support and training offered by the organisation had been a big help.

She said: “I would have struggled to get into business if it hadn't been for them.”

To contact WEETU visit www.weetu.org or call 01603 230625.

Are you a woman who has achieved major business success? Call Evening News reporter Sam Williams on 01603 772447 or e-mail sam.williams@archant.co.uk

US Birthrates Are Highest in August: Farmers

LOS ANGELES--(BUSINESS WIRE)--A study by the U.S. Census Bureau (2005) shows that August is the month with the highest number of births recorded in the United States. Unfortunately, in today’s economic climate, many parents are experiencing more than labor pains, because while still in the hospital, the identities of mother and child are being stolen.

The Federal Trade Commission released its national ID theft survey, which for the first time contains statistics specific to medical identity theft. According to the FTC report (p. 21), 3 percent of all identity theft victims in 2005 were victims of medical identity theft, which means of 8.3 million ID theft victims, approximately 250,000 people were victimized by medical identity theft in that year alone.

Jeff Dailey, Farmers President of Personal Lines explains, “A baby’s name can be used to open accounts by using the information the mother gives at the hospital, including her maiden name.”

It could take years before parents realize that their child’s identity has been used fraudulently. “Bank accounts can be discovered when a child first goes for a driver’s permit; or a child can be turned down when applying for college education loans or when opening a checking account,” Dailey notes. “There are some precautionary steps that parents can take to protect their children and themselves.”

Do not leave identity papers in your clothing that you hang up in your hospital room. Make sure you empty your pockets and put any identification information in a safe place.
Leave all of your credit cards at home in a safe, or somewhere you know will be safe.
Once your child has been given a social security number, make frequent checks of your child’s and your credit reports. Your child should have a clean credit record until 18 years of age.
Keep a look out for any solicitations for credit that your child might receive in the mail, or telephone calls offering credit cards, magazines, books or other offers.
“If you follow the precautions you should not have any ID problems after your stay in the hospital,” Dailey continued. “Since Identity Theft is the fastest growing crime in the world today, Farmers insurance has developed comprehensive identity theft coverage. Farmers Identity Shield not only helps you restore your identity after an identity fraud, but also provides protection for your children by alerting you when such activity begins. Those who have experienced its devastating effects know how hard it is to fix and how much time it takes,” he added.

Dailey explained that Identity Shield includes a 24/7 advocate to guide and assist victims. An expert also is on call to answer any questions policyholders may have about children or adult identity theft. “There is much more, including assistance in replacing lost, stolen or damaged identification documents and prevention tips,” Dailey said.

For more information on identity theft and how to prevent it, contact your local Farmers agent or visit www.Farmers.com

Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services, an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Farmers® is the nation's third-largest Personal Lines Property & Casualty insurance group. Property and casualty products are underwritten and issued by the Farmers Exchanges and their subsidiaries, which Farmers Group, Inc. manages but does not own. Headquartered in Los Angeles and doing business in 41 states, the Farmers insurers provide Homeowners, Auto, Business, Life insurance and financial services to more than 10 million households. For more information about Farmers, visit our Web site at www.farmers.com

The next billion

Till a few years ago, N. Padmavathy and her six friends were daily-wage workers in an export unit in Chennai, with a monthly income of not more than Rs 2,000.

At times, when she had to pay her children's school fees or take her children to the doctor, she had to borrow at hefty rates from the local money lender.

As a daily-wage worker, she could never predict her income, till she discovered the power of microcredit. A Rs 15,000 loan each, taken by Padmavathy and her six colleagues, has made entrepreneurs of these daily-wage workers.

Today, they are the proud owners of a tailoring unit, which is an exclusive franchisee of a leading exporter.

Says P.N. Vasudevan, managing director of Equitas: "The loans we provide not only help the customers improve their business activity levels but also because of lower rates and easy repayment periods, customers can come out of the debt trap laid by money lenders."

Thanks to urban micro-finance institutions (MFIs) like Equitas, Padmavathy and others of her ilk now have access to credit and a better way of life.

Seeing an aching need among this category, often referred to as the Next Billion, a new set of players are coming up in urban hubs to offer financial solutions—primarily credit and insurance—to this economically active group of consumers.

If daily wage workers in Chennai are buying out garment manufacturing units, in Mumbai puran poli makers are doubling their turnover with easy access to microcredit.

Micro-finance may have started as an idea by the not-for-profit sector to cater to those who were out of the ambit of any financial sector, it has, however, emerged as a market share opportunity that banks and non-banking financial companies are fast lapping up.

Conceptually it's an irony-because what started out as an answer to the neglect by the financial sector is fast turning out an opportunity for it-and poses a dilemma- because regulation of this sector is through social pressure only.

Azerbaijan to adopt Law on Money-Laundering Counteraction at autumn parliamentary session

Baku, Fineko/abc.az. The process of adopting the law begun in 2004 on counteraction of legalization of money resources and property received by criminal way and financing of terrorism has all chances to be completed in 2008.

The National Bank of Azerbaijan General Director and Director of Workgroup for Law Elaboration Rufat Aslanli said the Bill has already been adopted in the first reading.

“We expect it to be adopted in further readings straight after resuming parliamentary activity in autumn,” R.Aslanli said.

The law which is the country’s obligation while entering into the European Council introduces system of monitoring under transactions and the operations exceeding the amount of AZN 20,000. The monitoring will cover credit institutions, insurance and reinsurance companies, professional participants of a securities market, leasing services of credit institutions, money transfers through post offices and other organizations, pawnshops, investment funds, transactions with precious metals and stones and purchase of precious products, non-governmental and religious organizations, organizers of lotteries rendering real-estate sale-purchase services (realtors) as well as lawyers, auditors, real estate deals, client assets, securities and property, client bank and depot accounts. A special state body will be established for the monitoring.

Elaboration and international expertise of the Law was completed in May 2005.