Mr Clarke said: “The bank has a good opportunity to be the sort of bank we used to love, the one we used to trust and the one that used to do a good job for us.”
Tesco agreed to buy out Royal Bank of Scotland’s 50% share of its financial services business in 2008 and currently offers savings accounts, credit cards, loans and insurance.
Asked when its long-anticipated mortgage launch will occur, Mr Clarke said: “We have to get clearance from the Financial Services Authority. That process is going well.
“The systems are all ready to go, so the autumn at the latest I would have thought, maybe a bit sooner.”
Finance director Laurie McIlwee said if Tesco could snap up a 1% share of the market, equivalent to a £10 billion mortgage book, this could generate annual profit of around £300 million.
Tesco Bank, which opened a service centre in Glasgow in October, had earnings of £264m in the year to the end of February, up 5.6% on the previous 12 months. Revenue rose 6.9% to £919m.
Tesco said strong performance also allowed it to release some accounting provisions made when it acquired the bank.
Mr Clarke said Tesco, which is the UK’s biggest grocer with a 30% market share, had not rejected the idea of instore branches despite closing six pilots, including one in its Glasgow Silverburn store.
He said Tesco Bank, headed by former HBOS and RBS executive Benny Higgins, will launch a branch network “probably next year” but most business will be transacted via teller machines or online.
Tesco Bank is just months away from completing the move from RBS’s IT platform, it said.
Tesco posted a 12.3% rise in underlying profit before tax to £3.8bn in the year to February 26 as group sales rose 8.1% to £67.6bn.
Overseas earnings, particularly from Asia, grew strongly.
In a striking change of tone from his reticent predecessor Sir Terry Leahy whom he replaced in March, Mr Clarke openly signalled dissatisfaction with the 2500-store UK business. It recorded a 3.8% rise in trading profit to £2.5bn.
UK same-store sales fell 0.7% year-on-year in the fourth quarter.
Tesco estimated that recent rises in taxes and prices, particularly fuel, have removed £18 a week from the budget of the average family.
Mr Clarke said: “It is not surprising that customers are cutting back to make ends meet.”
But he said Tesco in the UK has also “lost momentum”.
“Our performance in the UK has been below par,” he added.
He demanded improvements to its clothes, electrical and home ranges.
Mr Clarke said he would take the US business “one step at the time” after the Fresh & Easy chain fell further into deficit only months after Tesco said losses had stabilised.
Tesco’s shares fell 6.5p to 393.5p.