Tesco (TSCDY) Explores Banking market

British grocery giant Tesco (NYSE: TSCDY) is planning a foray into new uncharted territories. Tesco is planning to delve in non-grocery arenas such as banking and telecom. Tesco is looking to double its profits from the non-grocery business. Currently, Tesco’s banking foray is limited to credit cards and car insurance and these activities contribute 9% of Tesco’s profits before tax. Therefore, Tesco has a wide room for increasing its banking activities.

Tesco currently has 2300 stores in UK and if it plans to open banking activities through those stores, it will have the distinct advantage of low investment expenditure. Although Grocery business doesn’t offer any direct synergy to banking business, but in keeping in view the past innovative strategies of Tesco, it is expected that Tesco would succeed in achieving its target of doubling non-core profits.