House of Fraser is exploring a partnership with challenger bank Tandem, which would see it invest £35m in the bank.

The tie-up would allow Tandem, which secured its banking licence just one year ago, to offer lending services to House of Fraser customers, according to the Telegraph.

Tandem only offers savings account but plans to launch current accounts and credit cards next year.

An investment from House of Fraser, which already offers customers credit through NewDay, of up to £35m would form an “initial commitment” and be subject to unspecified conditions.

The department store chain will release more details of the tie-up in its five-year plan, which it plans to reveal in the first half of 2017.

Frank Slevin, the retailer’s chairman who is a former senior HSBC banker, told The Telegraph: “House of Fraser is committed to a transformation of its business over the next five years and this new partnership is just one illustration of how we’ll deliver a meaningfully different set of services to our customers.”

The chain, which is owned by Chinese conglomerate Sanpower, suffered more than its fair share of blows over 2016.

An exodus of senior management was concluded by the resignation of chief executive Nigel Oddy, who will depart next year.