Tesco rules out bid for Clydesdale’s branches

Published on Thursday 9 February 2012 02:21

THE head of Tesco’s banking operation has effectively ruled out a bid for the Clydesdale Bank, as he insisted the business did not have any “acquisition aspirations” for the Glasgow-based institution amid speculation of a possible sell-off.

Benny Higgins, chief executive of Tesco Bank, said it did not “need branches in the high street” as he quashed speculation it would pick up assets from Clydesdale and Yorkshire banks, after their Australian owner announced a three-month review of its UK holdings.

Mr Higgins’s strongly worded statement came as Clydesdale came under mounting pressure to rule out job losses as banking chiefs remained silent on the impact of any sale, amid deteriorating economic conditions.

He said Tesco Bank would be “silly” not to look at opportunities to acquire loan or savings books, but insisted the business was not interested in establishing a branch network and that the operation would “primarily be an online bank”.

Mr Higgins said: “We are not interested in branches that simply add some more real estate when we have a strong relationship with the customers we are focused on and that visit Tesco in-store and online.

“We are focused on organic growth. We have not got acquisition aspirations. But we don’t need branches in the high street. There is nothing that would obviously appeal in terms of buying a book of business.”

Meanwhile, SNP MSP John Wilson, the deputy head of Holyrood’s economy committee, called on Clydesdale to safeguard the jobs of its 8,300 employees in the UK, and promised to raise the issue at Holyrood.

He said: “I urge Clydesdale Bank to take on board the financial and social implications of any decision to reduce branch options or services in Scotland.”

Colin Borland, of the Federation of Small Businesses (FSB) in Scotland, warned against any closures of the bank’s 337 branches. He said: “Anything that leads to less competition in the banking small business market is a matter for concern.”

A spokesman for Clydesdale refused to comment. Its chief executive David Thorburn said “re-shaping the business will mean … tough decisions.”

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Velv

Thursday, February 9, 2012 at 08:04 AM

Why would you want to buy branches on a high street that is already dying when you own 2,000 shops elsewhere in every town and city? A Mortgage business on the other hand might enhance Tesco's portfolio

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