Tesco is clearing the storerooms of some of its Extra stores to use as bank branches.

The retailer has started storing back stock on the shop floor on its top shelves and is planning to use the free space in storerooms to help achieve its target of opening 30 banks this year, The Grocer has learnt.

"We are looking into using the space for banks as well as other concessions, such as opticians and pharmacies, though nothing has been finalised yet," said one employee.

A team from Tesco's head office is understood to be examining the planning regulations of each Extra. "The concessions will be a no-go in some stores because of trading restrictions, but they will use the room for bulk promotional items and non-food," said another insider.

Tesco first trialled the empty warehouse initiative in some stores in July as part of its stock reduction programme and has since rolled it out to all stores. A source close to the retailer claimed the move would improve revenues because a large chunk of working capital and cashflow had been tied up in stock sitting in warehouses.

"It doesn't look the most attractive, but it saves ­money and increases productivity, as a member of staff working that aisle just has to pull down the overstock and replenish it before the next delivery," he said. "This way Tesco does not need to employ staff to wheel out hundreds of pallets and cages with stock on." A store manager added: "Storing back stock on the top shelves has really simplified our operation, sped up the replenishing process and improved my store's online availability by about 1%."

Tesco currently has six banks in stores. The news comes after Sir Terry Leahy announced last week that Tesco Personal Finance had been renamed Tesco Bank to reflect its ambition of taking on the high street. Tesco first announced plans to open 30 branches, and offer full service banking such as current accounts and mortgages, in March.