Asda Financial Services already sells personal loans, child trust funds, travel money and insurance. The travel money is provided and administered by Travelex with the insurance cover from LifeSearch.
The supermarket, a subsidiary of the American retail giant Walmart, said that it “registers trademarks all the time” but would not confirm or deny whether it would launch into mortgages.
Ben Thompson, director of mortgages at L&G Mortgage Club said that any benefits from a possible launch are a long way off.
“If they are to become a lender, it will be a long road to become a fully-fledged lender post-authorisation.”
In April 2010, Tesco Bank announced it would be launching a range of mortgage products as part of its plans to become a full-service retail bank.
It had initially planned to launch last summer but delayed its plans, which reports have suggested was down to the level of red tape it was facing from the FSA. The bank is expected to launch early this year.
Andrew Baddeley-Chappell, head of mortgage strategy and policy at Nationwide said: “Asda’s potential launch into mortgages reminds us that we continue to await with interest Tesco’s entry into the market.
“As Tesco appear to have discovered, selling and servicing related mortgages is very different to selling groceries and consumer goods. Given the impending regulatory changes and the continued mortgage market fragility this does not appear the natural time to be considering this market.”
Baddeley-Chappell added that while Nationwide welcomes competition, it expects that it would take Asda time to build the scale of mortgage presence which would have a “substantial impact” on the wider mortgage market.
Thompson added that if Asda launched into mortgages, it would be wrong to assume it would do direct-only lending.
He said: “I think most new lenders will find or have found that the intermediary channel is the quickest way to hit volume, targets and profitability thresholds. The risk quality is there as well.
“It would not surprise me at all if this rumoured launch started direct and became intermediary very quickly because that is where the volume and quick scale is to be found.”
