Supermarket chain Tesco is poised for a further push into the UK mortgage market with news that the company is applying for a second credit rating for its Tesco Personal Finance division. This would allow Tesco to effectively ring fence the financial division, which currently borrows through the parent company, and allow direct access to money market funds.

The financial division is currently piggybacking the Tesco parent company and using its financial strength and financial credit rating to access funds. The ability for the division to effectively "look after itself" and use its own credit rating to access funds offers the opportunity to expand the operation quicker and more efficiently. It also opens up the intriguing prospect of hiving off the financial division from the parent company and potentially raising significant funds in the long-term.

While the power of Tesco's supermarket division is vital, and the access to millions upon millions of customers each day, there is a feeling that the company has the potential to build up various profitable subsidiaries which could then be sold off or operate separately from the main company. However, it is worthwhile noting that Tesco will not be going down the same route as Northern Rock which depended upon the money markets too much which ultimately led to the company's demise.

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