Tesco is considering a separate credit rating for its financial services arm as it seeks to step up its banking operation.

Andrew Higginson, chief executive of retailing services, said the financial services arm could apply for a separate rating from credit agencies to allow it to borrow directly in the market, rather than through parent company Tesco.

He told The Financial Times: “We are very much moving towards being a standalone bank. If you’re going to build a sizeable [mortgage] book, you would have to start thinking about wholesale funding.”

He said Tesco Personal Finance – which is planning to launch current accounts and mortgages – would remain a wholly owned subsidiary of Tesco.

Tesco deposits have almost doubled since mid-October and Tesco chief executive Sir Terry Leahy pledged to transform the retailer into the “people’s bank” to capitalise on public anger at multimillion-pound bank bail-outs.