Personal Finance Moves into Profit

Tesco PLC                                     
3 November 1999
                                       

TESCO PERSONAL FINANCE MOVES INTO PROFIT AND TARGETS THE INTERNET TO ASSIST IN
                                 FUTURE GROWTH

Tesco Personal Finance, the joint venture owned by Tesco plc and The Royal
Bank of Scotland, has moved into profit after only two years.

Launched in July 1997, TPF now serves over a million customers. New internet
activities are now offering even further potential for growth.

TPF is rapidly developing an internet capability which has the unique benefit
of a direct link to the Tesco web site, tesco.co.uk.  Of the 78,000 customers
visiting the Tesco web site each week one in 10 visits the financial web
pages. Currently the internet loans offer is one of the most popular sites
on tesco.co.uk with traffic to this site expected to grow very rapidly as
Tesco develops its internet capabilities. The number of customers visiting
tesco.co.uk weekly has grown from 55,000 to 78,000 in a period of two months.

TPF is introducing an online banking service which will enable savings
customers to view their account balance and transfer money over the internet.
Work is also ongoing on a variety of new initiatives to make applying for
products online easier.

Iain Clink, Chief Executive of Tesco Personal Finance, comments: 'Tesco
Personal Finance has really made its mark in delivering value for money
services for customers.   Having established a winning formula with stores, we
will build on this success by developing a customer focused internet site.
It is our link with the Tesco web site that gives us a big advantage - as it
attracts more customers so will we, and more importantly the virtual
supermarket, through brand loyalty and customer traffic, will have even lower
customer acquisition costs than the real supermarket.'

Tesco Personal Finance's success has built on the Tesco brand values of
excellent customer service and value for money products.  With more than
eighty per cent of applications coming directly from customers in Tesco stores
the cost of attracting new customers is a fraction of the industry average.
Other new entrants have had to invest heavily in establishing new brands and
do not have the cost advantages of Tesco Personal Finance, where it has been
possible to leverage off the existing, well-established brand.

The business continues to grow rapidly and in three months to September 1999,
330,000 applications for products were received.  The current high growth rate
is expected to continue and it is anticipated that Tesco Personal Finance will
have several million customers within the next few years.

Tesco Personal Finance's Chairman Rowley Ager said: 'With high up front
marketing costs new entrants into the personal financial services market are
finding it difficult to move into profit;  for Tesco Personal Finance to have
achieved this in just two years is a remarkable result.'


Contacts:

Tesco Personal Finance   Iain Clink               0131 523 9000
                         Mark Austin              0171 615 2050

Royal Bank of Scotland   Sir George Mathewson     0131 523 2018
                         David Appleton           0131 523 4414

Tesco                    Andrew Coker             01992 646739