Tesco increases spend on banking IT

Systems underpinning Tesco Bank were among the factors prompting an increase in Tesco's capital expenditure, the retailer said in its annual results

Changes to systems underpinning Tesco Bank were among the factors prompting an increase in Tesco's capital expenditure, the retailer said in its annual results today.

The group's capital spend for 2010 was £3.7bn, up from £3.1bn in the prior year and surpassing expectations, according to the firm. While this was mainly due to exchange rate movements, Tesco said this was also due to increased IT costs.

Capital expenditure in the UK was £1.7bn, with an additional £200m in the group's banking arm, mainly for the re-platforming of systems.

According to Tesco, some "good progress" has been made in terms of systems work, which is due to complete on schedule this year.

Tesco opened its banking and insurance service centres in Glasgow and Newcastle in October. Its motor and home insurance business - including renewal policies sold since then - has been written on new systems.

The company's first new product, Fixed Rate Saver, was also based on the company's own banking platforms.

Other technology-related highlights in Tesco's results included a 30% increase in UK sales at e-commerce site Tesco Direct. The company also said its iPhone application now accounts for 12% of customer traffic.

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