TESCO Personal Finance, the supermarket bank, is likely to hire banking stalwart Benny Higgins as chief executive amid speculation that it will move its headquarters out of Scotland.
The £1bn deal to buy out Royal Bank of Scotland's half share in the venture is due to complete soon, and speculation has been circulating that Higgins will head the newly independent business.
Sources say his appointment will be confirmed once th
e deal goes through.
Robin Bulloch, the current chief executive, lives in Glasgow and is an RBS employee. He was previously director of RBS relationship banking.
Tesco is said to have been looking for a successor for Bulloch and sources say Higgins has been offered the role. Higgins, 47, previously ran Tesco PF, which was launched in 1997, while he was chief executive of retail banking at RBS. Sources say he gained the respect of Tesco chief executive Sir Terry Leahy during that time.
Higgins joined RBS in 1997 and surprised the banking sector when he moved to rival HBOS in 2006 to become head of its retail bank and number two to Andy Hornby.
He made a shock exit from HBOS last August as part of a boardroom shake-up; he appeared to carry the can for the decline in the bank's share of the UK mortgage market and slump in retail profits. At the time it was said he left "by mutual agreement". He is well respected in financial circles, having spent his entire career in the sector in Edinburgh.
He abruptly quit Standard Life for personal reasons in 1997, just seven months after he became the youngest-ever general manager of the insurer.
Tesco PF is currently headquartered at South Gyle in Edinburgh where about 200 people are employed.
RBS is expected to sell its 50% stake to Tesco as part of its drive to dispose of non-core assets to shore up its balance sheet. As the UK's biggest supermarket bank, with more than five million accounts and profits of around £130m, it is an attractive proposition for Tesco.
Sources say the parties have agreed a deal and are currently in discussion with the financial regulator.
Jobs in Edinburgh are not thought to be under immediate threat and it is likely that Tesco PF will continue to operate under RBS's banking licence until the supermarket gets clearance from the Financial Services Authority for its own licence. This could take around two years.
At that point, according to sources, Tesco PF is likely to relocate its headquarters to Welwyn Garden City in Hertfordshire rather than run it from Scotland.
A source said: "Tesco has found it difficult to get staff to move to Edinburgh. Many of its employees live south of the border and are put up in hotels in Edinburgh for a few days each week. I don't see why they would continue shipping people up to Scotland if RBS wasn't involved."
He added that the general consensus within Tesco PF is that the deal is going through.
RBS is also trying to sell of its insurance business, which includes the Direct Line and Churchill brands.
The full article contains 525 words and appears in Scotland On Sunday newspaper.
