Fairly detailed update on the competition between UK Grocery stores in the banking space. Profits from Tesco financial arm are quoted at £202m which places them on a level approaching a smaller Canadian bank for example.

From my own observation, they (Tesco) do a good job at integrating the financial products with their own at the checkout. It feels natural, and seamless to the consumer, unlike the North American model with banks established within grocery stores. Those do not have the same natural integration, which explains the sporadic success they have there.

At this level, the UK groceries are sufficiently consequential to be noticed by the major banks.

Guardian Unlimited Money | News_ | Check out deals on supermarket savings

Sainsbury's and Tesco are leagues ahead of Asda and M&S on financial services. Despite the brokers' disparaging comments, Tesco surprised by offering good motor insurance rates for the scenarios we tested.Sainsbury's did best overall, offering a best-buy credit card for introductory purchase rates and a best-buy internet savings account. It also offered a relatively competitive loan rate, with a product likely to be best suited to those borrowing large amounts who want to avoid paying onerous premiums for payment protection insurance.

All the supermarkets fared badly on travel insurance; this is a product where it is worth hitting the internet comparison sites.
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