High street stalwart Marks & Spencer is to open a chain of banks, backed by HSBC.
If you sign up to a current account with the new bank you will become an HSBC customer even though business decisions and profits will be split 50:50 with Marks & Spencer (M&S).
This means that the new bank will not represent the type of "new blood" into the UK's financial services to help increase competition that was recommended as one of the conclusions to come out of the Vickers report and the Independent Commission into Banking (ICB).
Tesco Bank, which already has 6.5 million customers, plans to launch its own current account and could have a more significant impact in the manner recommended by the ICB.
The first M&S branch is scheduled to open in July inside its London Marble Arch flagship store.
The retail group said it plans to open 50 M&S Bank branches in its stores across the UK over the next two years, creating 500 new jobs.
It added that branch opening hours will be “twice as long” as traditional high street banks, mirroring M&S store opening hours, so that customers can bank while they shop, seven days a week.
Colin Kersley, chief executive of the new M&S Bank said: "This is an evolution into current accounts and banking,"
Account holders will also have 24 hour access to online banking, as well as UK based call centres.
A current account will be made available from autumn 2012 and customers can pre-register their interest in July. Mortgages will be offered by the bank at a later date.
Marks & Spencer chief executive, Marc Bolland, said: “This bank will be built on M&S values: putting the customer at the heart of the proposition and delivering the exceptional service that sets us apart from the competition.”
More than three million customers already use M&S Money products, including credit cards, loans and savings.
M&S Money, which launched in 1985 and was sold to HSBC in 2004, will be re-branded to M&S Bank later this year.
Meanwhile, the company’s annual report has revealed that Mr Bolland will receive a reduced annual cash bonus following a drop in profits.
His total package, including benefits, fell from £4.96 million – when it included a 'golden hello' for moving from Morrisons – to £2.5 million for the year to March 31.
Mr Bolland’s cash and shares bonus has been cut to £663,000, but his basic salary remains at £975,000. The pay deal also includes £500,000 in shares that vested in December.
The retailer’s underlying pre-tax profits fell one per cent to £705.9 million in the year to March 31, but total sales grew two per cent to £9.9 billion.
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