David Prosser: Time running out for Tesco stalwart to make a big splash in banking

Outlook The departure of Andy Higginson from Tesco is the latest in a steady stream of senior figures moving on since Sir Terry Leahy stepped down as chief executive earlier this year. Fears about a brain drain, however, are overstated, for Tesco's problem has long been that it has too few top-level posts into which it can promote from a large pool of talented second-tier executives.

What's intriguing, however, is that Mr Higginson has announced his leaving date before realising the ambitions the grocer has long had for the part of the business he chairs. Tesco Bank, as the personal finance business has now traded for some time, has yet to begin offering a full range of banking services. Above all, it is not yet possible to open a Tesco current account – and despite the grocer's protestations to the contrary, some think it never will be.

The target date for such a launch has long been 2012 (is that why Mr Higginson is not stepping down until September next year?) but the next significant date for Tesco's march into banking will come much sooner. For like everyone else in the banking business, it wants to know how Sir John Vickers' Independent Commission on Banking plans to fulfil its remit to promote greater competition.

Sir John's inquiry is due topublish its final report in a few weeks' time. Back in April, he made some interim suggestions on improving competition – headline proposals such as forcing Lloyds to sell off more branches than it has to under the existing deal with European regulators, and some more minor ideas, such as making it easier for customers to change current account provider.

This is all worthy stuff but may not make the business case for Tesco moving definitively into current accounts any stronger.

The grocer's intention in the past has been to use its stores as the basis for a branch network, rather than acquisitions, though pilot scheme results appear not to have been particularly encouraging. Measures to encourage account switching might be a help at the margin, but aren't going to make or break Tesco's banking ambitions.

What Sir John's inquiry doesn't look minded to address is the biggest barrier of all to new entrants to the banking industry: the fee-free current account. Since none of the established current account providers charge for basic services, no new entrant to the business would dare to do so either. But that means the break-even date for any new venture is likely to be several years into the future – and the losses for a large-scale new launch are likely to be sizeable in the meantime.

Can Mr Higginson and his near namesake Benny Higgins, the banking industry veteran who runs Tesco Bank these days, resolve that quandary? In the case of the former at least, time is now running out.