Tesco Personal Finance - Case Study Example

News Release, (2008), “Tesco takes full ownership of TPF and targets £1 billion from retailing services”, Tesco plc, retrieved online, 4th April, 2009, from: http://www.tescoplc.com/plc/storage/intannounce.pdf 21 Stern, M., (2008), “Interview: Tescos FD, Andrew Higginson”, Financial Director retrieved online, 4th April, 2009, from: http://www.financialdirector.co.uk/financial-director/features/2229174/shelf-confidence-4297859 21 Royal Bank of Scotland Group PLC: RBS Preferred Series "T" and RBS Preferred Series "Q", (No Date), Stanford Law School Securities Class Action Clearing House, retrieved online, 17 April 2008, from: http://securities.stanford.edu/1042/RBST_01/ 22 Tesco Personal Finance that was set up in 1997, as a joint venture between Tesco and the RBS.

From a strategic perspective the TPF was established to draw on the Royal Bank of Scotland’s financial expertise while using the Group’s stores and online resources as a medium to recruit and cater financial services to the customers at low-cost. However, after a decade, the joint venture came to its termination with the Tesco gaining the full ownership of Tesco Personal Finance. On July 28, 2008, Tesco, the supermarket retail giant announced that it had come to an agreement with the Royal Bank of Scotland (RBS) to buy its 50% stake in the Tesco Personal Finance for a sum of £950 million (News Release, 2008).

This acquisition of Tesco over the 50% stake of RBS coming as a direct challenge for the high street financial institutions which currently are on the stormy side of the economic recession tide and presently are in-waiting for the bank charges decision by the High Court. The acquisition will help Tesco to make its expansion from financial services that revolved around an assortment of popular financial services and products to full-fledged retail banking