Retailing giant Coles will tackle the major banks head on as it seeks a formal banking licence, allowing it to add savings accounts to its existing financial services products.

Coles is understood to be well down the track in obtaining an Authorised Deposit-taking Institution licence from the Australian Prudential Regulation Authority, which will allow it to take deposits under its own name rather than in partnership with a bank.

Driving into financial services ... Coles. Credit:Nic Walker

The move comes as supermarkets spread their reach into the financial services sector, offering products such as insurance and credit cards.

The licence is likely to be held by Coles’ parent, Wesfarmers, under a non-operating holding company structure such as that undertaken by Suncorp to distinguish its banking and insurance operations. Coles’ car insurance product is already issued by Wesfarmers.