Morrison to open in-store banks

William Morrison, the Bradford-based supermarket group, has become the latest food retailer to launch a banking operation.

It has teamed up with Midland Bank to offer what it claims will be the first "full service" bank in the aisles of a superstore. It follows similar moves into financial services by Tesco, Sainsbury's and Safeway.

The first "Midland at Morrisons" branch will open at the group's Five Lane Ends store in Bradford in May. Further branches will be opened in the next few months and a new savings account will be introduced later in the year.

The in-store banks will be staffed by Midland workers and Morrisons staff can also use a direct telephone link to the bank's national call centre as well as cash and deposit machines.

Morrison hinted at a possible move into financial services when it announced its full-year results last week. It is also creating 2,250 extra jobs as it opens its first stores in the South next year.

The supermarket group is the latest to join the rush into financial services which was started by Tesco when it launched its ClubCard Plus deposit account last year.

Since then Safeway has teamed up with Abbey National and Sainsbury's has formed a joint venture to open a fully fledged Sainsbury's bank. Some banking analysts have questioned the wisdom of supermarkets moving into financial services, saying they risk "brand contamination" if mistakes are made.

However, the superstores feel they can use their brands across a range of services. Some analysts say a price war on savings accounts is possible as banks and building societies may seek to match the supermarket rates.