THE chief executive of Tesco Bank said it has been making great progress amid the toughest trading conditions for generations, although the company has delayed the launch of a key weapon in its armoury.

Benny Higgins said the bank has taken large strides following the takeover of the business by the giant retailer in 2008, since when it has opened a head office in Edinburgh and an operations base in Glasgow.

"It has been the most challenging set of economic and market conditions for generations," Mr Higgins said at a briefing in Edinburgh. "Against that backdrop I am delighted with the progress the bank has made."

Noting Tesco Bank has grown customer account numbers by 25% to 6.5 million since the take-over, Mr Higgins said growth had been good news for Scotland.

"We've created a lot of jobs in particular in Scotland in an environment in which we've seen the reality and the threat of job losses," said Mr Higgins.

The bank employs 2250 people in Scotland, out of a total of around 3000 staff.

It employed around 200 people in Scotland when Tesco bought control of the business from a joint venture with Royal Bank of Scotland for £950m.

A former head of retail banking at RBS and HBOS, Mr Higgins was speaking days after Tesco Bank said it will wait until next year to launch a current account.

This is expected to play a key part in Tesco's efforts to take on the five institutions that dominate the retail banking market, including Royal Bank and Lloyds Banking Group.

Tesco Bank had hoped to add a current account to its range of services, which includes loans, credit cards, savings accounts and insurance products, this year.

However, Mr Higgins said the bank decided to wait to make the most of expected changes in the market. The Payments Council is working on a "redirection service" which will make it easier for people to switch account providers, which should be operational by September next year at the latest. Mr Higgins made light of the delay, adding that Tesco Bank had always planned to wait until the work required to consolidate the operation's standing as an independent business had been completed.

"It was never in prospect that we would do current accounts any earlier than the end of this year," he said.

Mr Higgins also downplayed a delay in the launch of mortgages, from autumn 2011 until later this year.

Noting the mortgage market is quiet currently he said: "It's not a delay that concerns me – it's more important that we get it right."

Tesco Bank expects the mortgage operation will employ around 200 people in Glasgow.

Mr Higgins believes Tesco will be well placed to compete in both markets.

He said the bank can draw on the powerful brand and massive customer base developed by the parent retailer. This includes 16 million holders of Clubcards in the UK.

Philip Clarke, who recently succeeded Sir Terry Leahy as chief executive, is very supportive.

"He says the bank is very important to the group," said Mr Higgins.

Tesco Bank could use its retail deposit base to fund its initial entry into the mortgage market without relying on wholesale funding.

Mr Higgins said Tesco Bank remains focused on organic growth but might consider acquisitions that would enhance its capability.

''