Leading grocer Tesco has announced that it will extend its Tesco Bank offer by adding mortgages to its list of services.
Holders of its Clubcard will receive Clubcard points as they pay back their mortgage, collecting one point for every £4 on monthly repayments as the supermarket chain looks to reward customer loyalty amid difficult trading conditions.
Last week, Tesco’s outlook downgraded by S&Pthe retail giant was downgraded by ratings agency Standard & Poor, which downgraded its outlook to negative as a result of declining sales figures, warning of “intensifying competition in Tesco’s home market.”
Commenting on the launch, Tesco CEO Philip Clarke explained that the retailer’s solid reputation will make it a contender in a crowded market.
“Customers want choice in banking from a brand they know and trust to deal with them fairly.
“The launch of Tesco Bank mortgages is a major milestone towards offering Tesco customers a full retail banking service.”
Strengthening its offering and entering the highly competitive mortgage market, Tesco has started rates at 3.19 per cent for the 15 million UK Clubcard holders in the UK.
This move follows news that high street retailer Marks and Spencer (M&S) has introduced two current accounts involving a setting up fee which sees the retailer offer the first fee paying bank account in the country.
Tesco believes that it offers competitive rates and flexible product features and linking its financial services to rewards is a further move to entice consumers.
“Entering the mortgage market is a significant step in broadening the products we offer to Tesco customers,” Benny Higgins, CEO of Tesco Bank, commented.
“With a focus on serving Tesco customers for the long-term, we will take responsible lending decisions and have developed a mortgage business to meet our customers’ needs now and into the future.
“We begin as we plan to go on – launching a product for Tesco customers designed to meet their expectations of value, customer service and reward.”