Friday, 15 June 2012

M&S and HSBC extend banking joint venture

Marks & Spencer has announced plans to open 50 in-store bank branches over the next 2 years, and to re-brand M&S Money as M&S Bank.

It is a significant development for Marks & Spencer and in addition to the card, loans, savings and insurance products currently offered by M&S Money, the product range will extend to current accounts this autumn and mortgages at a later date.

It is understood that M&S Bank will operate under a separate banking licence to HSBC, but that it remains a subsidiary of the bank. However, profits will be continue to be split 50:50 between the 2 partners; last year the financial services business contributed profits of just over £50 million to M&S's operating profits.

The reputational risk of offering M&S branded mortgages is probably the most significant issue for the new bank, but these will effectively be HSBC products, and presumably subject to the same underwriting rules. The move into mortgages and current accounts pre-empts a similar move expected by Tesco Bank this year.

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