LONDON/EDINBURGH, Aug 20 (Reuters) - Plans by Tesco , Britain's biggest retailer, to expand its financial services received a government endorsement as the firm announced the creation of over 800 new jobs in Scotland.
Tesco Personal Finance (TPF) said on Thursday the jobs will be created with the opening of a new customer service centre in Glasgow.
Tesco, which has received a 5 million pounds ($8.26 million) grant from the Scottish government to help set up the centre, is keen to take advantage of the public's disillusionment and anger with traditional banks following the financial crisis.
'The opening of the new customer service centre will be a significant step towards TPF offering a full banking service. It is hard to ignore that people's trust in the banking sector is at a very low ebb,' said Andrew Higginson, chief executive of Tesco Retailing Services.
Speaking at a media conference, British finance minister Alistair Darling said the government was keen to encourage new entrants to retail banking.
'We need more competition in the banking sector. People need choice. And as a result of what's happened over the last year or so with the credit crunch, unfortunately a number of lenders have either withdrawn or greatly reduced what they are doing,' he said.
Tesco announced a major push into banking last July with a 950-million-pound deal to buy out Royal Bank of Scotland from the two firms' finance joint venture.
Tesco said in March it planned to open bank branches in 30 of its stores by the end of the year.
Darling said the retailer's investment represented a vote of confidence in Scotland's financial services industry.
'And it shows that even at this difficult time the Scottish and wider UK economy is still creating high quality jobs.'
Last week official figures showed British unemployment hit its highest rate since 1996 in the three months to June.
However, supermarket groups have continued to hire aggressively.
Wm Morrison Supermarkets, the UK's fourth largest grocer, said last week it would create 7,000 jobs in 2009, exceeding its initial target by 40 percent.
Shares in Tesco were up 1 pence at 364 pence at 1339 GMT, valuing the business at 28.8 billion pounds.
($1=.6054 Pound)
(Editing by Kate Holton) Keywords: TESCO/ (james.davey@thomsonreuters.com; +44 20 7542 7674; Reuters Messaging: james.davey.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
