SUPERMARKET giant Tesco today announced a plan to create more than 200 finance jobs.
The expansion of its UK banking operation in Edinburgh will see the Scottish capital become the headquarters for the firm's finance arm.
Industry leaders said it showed the city remains a key financial centre despite the problems faced by Edinburgh-based banks RBS and HBOS.
Tesco Personal Finance chief executive Benny Higgins said the recruitment was an "important step" in its expansion.
"Edinburgh is the ideal place from which to move what is already a successful business into the next stage of its development," he said.
"We have continued to attract some of the best talent from across the industry, both from within Scotland and from those looking to move here for the right opportunity.
"There is a real enthusiasm among our staff for being based in Edinburgh."
Tesco's finance arm has signed a 15-year lease on a new headquarters in the Haymarket area of Edinburgh.
It had been part of a joint venture with Royal Bank of Scotland, before Tesco completed its acquisition last December.
Around 250 members of staff will move from South Gyle, on the outskirts of the city, in the second quarter of this year, and will be joined by an extra 200 people recruited by Tesco in the next year.
Bosses say they also hope it will reduce the number of car journeys made by its staff – the new base is near several transport links.
Owen Kelly, chief executive of Scottish Financial Enterprise, welcomed the "exciting announcement" today as "a great reminder that Scotland remains an important global financial centre, with the people and skills to attract new business".
He added: "Tesco Personal Finance's decision to create its headquarters in Edinburgh, along with hundreds of new jobs, is a real boost for the city."
Tesco is planning to eventually extend its financial services from a collection of financial products to that of a full banking service.
Scottish Finance Secretary John Swinney said it showed that Scotland continues to enjoy a "global reputation" for excellence in banking services.
"Despite a global economic downturn and severe challenges facing parts of the financial services sector, there continue to be opportunities for growth," he said.
"The Scottish Government is determined, through our economic recovery programme, to ensure Scotland is well placed to take advantage of those opportunities, to support the industry as a whole and the wider Scottish economy."
Lib Dem MSP for Edinburgh West Margaret Smith said she hoped it would be the first of many positive announcements in the sector.
"Edinburgh, particularly, is heavily dependent on the finance sector and this is a real shot in the arm," she added.
Scottish Secretary Jim Murphy said it was good news for the capital and Scotland.
"Companies like Tesco Personal Finance set up and expand in places like Edinburgh because we have the people and financial expertise that is hard to match anywhere else," he said.
"This news is a timely reminder to some that Scotland remains a leader in the world of finance."