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Coles set to take on banks

Peter WilliamsThe West Australian
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The supermarket giants may be set to open up a new front in their battle for customers by challenging the big banks for savings account business.

Wesfarmers-owned Coles is believed to have an application for a banking licence in train with the Australian Prudential Regulation Authority which would allow the retailer to take deposits in its own right.

Coles has also in the past few months had trade marks accepted for the names Coles Money, Coles Financial Solutions and Coles Financial Group.

The moves have prompted speculation that the supermarket plans to expand its financial offerings beyond credit cards and insurance.

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Coles head of communications John Church would neither confirm nor deny a move into retail banking.

"We have had a small portfolio of financial services products including car and home insurance and a Coles credit card for a couple of years now," Mr Church said.

"These products have proved popular with customers and we have sold more than 200,000 insurance policies.

"Financial services is another area where we believe we can offer customers convenient, great value products."

Coles managing director Ian McLeod at Wesfarmers' annual strategy day in May talked up Coles' branded MasterCard, relaunched last year under an ongoing tie-up with GE Capital Finance Australia.

"We've got about 300,000 people on it and we want it to be front-of-wallet," Mr McLeod said.

Coles sells car and home insurance policies through Wesfarmers Insurance. Wesfarmers declined to comment about Coles' banking plans.

Woolworths is understood not to be pursuing a banking licence through APRA at this stage but is keeping its options open on banking services.

The retailer refused to go into details of future plans for financial services

"Woolworths offers its customers a range of simple, practical and value-for-money financial products, including car, home and pet insurance, credit cards and reloadable pre-paid cards," a spokesman said.

"We constantly listen to our customers to understand what services they would like us to offer in the future."

Both retailers have made significant inroads in petrol retailing through discount dockets issued by their supermarkets.

They also control about 60 per cent of the takeaway liquor market.

The pair is also eyeing international expansion, and are reported to have bids in for the potential sale of Hong Kong supermarket chain ParknShop. HIP-POCKET BUDDY 300,000 The number of Coles branded MasterCards offered in tandem with GE Capital Finance Australia. Coles sells car and home insurance policies through Wesfarmers Insurance.

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