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Tesco Bank to delay mortgage roll-out

Tesco Bank to delay mortgage roll-out

Category: Banking

Updated: 14/12/2012
First Published: 06/10/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Tesco Bank has confirmed that it is to delay the roll out of mortgages and current accounts until early next year.

The announcement came as the retail giant's banking division announced that it achieved profits of £44 million in the first six months of the year – a 65.9% rise on the same period last year.

In fact, had Tesco Bank not been caught up in the PPI mis-selling scandal, it would have posted profits of £101 million for the six months.

In its interim statement, the bank said: "We have also reviewed carefully the level of provisioning which is appropriate to cover possible future claims against Tesco arising from alleged mis-selling of payment protection insurance policies through our joint venture with RBS prior to 2008.

"Whilst the level of claims to date has been modest (£16m), as a result of this review, we have decided to increase our current provision, which was originally set up in 2009, by a further £57 million to £92 million."

Tesco Bank also revealed it has taken the decision to put back its target date to roll out mortgages and current accounts to early 2012 to ensure that it has a 'settled bank team, processes and systems'.

It comes after failings with its systems saw people locked out of their savings accounts earlier this year.

As a result of pushing back the launch dates for the products and 'the Bank absorbing double running costs', profits for the second half of the 2011/12 financial year are expected to be hit by £40 million.

Figures show that the take-up of savings accounts during the six months grew by 1%, motor insurance by 3% and credit cards by 4%.

Balances on Tesco credit cards increased by 3%, whilst savings balances rose by 2% over the half year.

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