A Mortgage with Your Ramen?

"Mortgages," according to a major British company, are looking quite attractive as a line of business."

There are several layers of mystery to this declaration, which was made just last week. It would sound odd coming from any company. It sounds odder still coming, as it does, from Tesco, a big supermarket chain.

As Tesco reported surprisingly robust profits last week, it also announced it would take full ownership of Tesco Personal Finance—a venture that itself has been profitable. It now has about 5.6 million accounts, including depositors, loan-takers and credit-card users. By buying out RBS, the retail bank with which it had partnered, Tesco says it has big plans for expansion.

And more counterintuitively still, given the troubles afflicting the grocery business, Tesco is able to do this thanks to its success in selling food. Worldwide, sales are up by 14 percent in the past six months, and profits are up 11 percent. A big part of that is thanks to the company's expansion into foreign markets including Asia. But even at home in Britain, same-store sales were up 3.7 percent even as most of its rivals continue to struggle.

Tesco is also taking on the U.S. market with its convenience-store-sized grocery outlets, prompting Wal-Mart and others to come up with their own competing chains.