Tesco is reported to be considering buying nationalised bank Northern Rock ahead of the next General Election.

The UK’s largest retailer is said to have shown provisional interest in making a bid for the bank, which was taken over by the state in 2007.

Tesco said it had “no comment to make on rumour or speculation”.

The grocer already has its foot firmly placed in the finance sector. It launched Tesco Personal Finance 12 years ago as a joint venture with Royal Bank of Scotland, and bought out RBS last year, in a deal worth £950m.

Tesco has almost 6 million customers and 7.5 per cent of the credit card market. It plans to offer mortgages in the future.