SPEKE-BASED online and catalogues retailer Shop Direct is expanding its financial services division.

Directors believe they can exploit a sense of mistrust of financial institutions caused by the credit crunch by appealing to their existing customers and, eventually, beyond.

The financial services arm has existed for decades, but the former Littlewoods group is in the process of expanding its operation.

It provides customers with credit, insurance and warranty products, including a credit card in partnership with Barclaycard.

Shop Direct Financial Services currently employs a 100-strong management team and 500 call centre operators at its Aintree base.

But it has now launched a recruitment drive for five senior departmental heads covering marketing, customer analytics, insurance product and commercial development, credit product and commercial development and insurance improvement.

Steve Makin, Shop Direct group financial director and chair of Shop Direct Financial Services, said: “Our Christmas trading statement said the business is performing strongly.

“We have some very strong brands and a lot of trust and heritage, and feel we can develop a deeper relationship with customers. We feel there’s strong growth potential.

“Trust in financial institutions has been knocked by the credit crunch and we feel customers are looking to other parties for help with their financial affairs. Littlewoods has a strong history and we feel it gives us the opportunity to work with more of our customers through financial products.

“At this stage, we are just looking at servicing the needs of our existing customers. In time, we may promote our products to customers who aren’t customers of our retail brands.”

The financial services arm is headed by chief executive Neil Chandler, former chief executive of Sainsbury’s Bank.

Shop Direct does not issue figures for its separate divisions, but Mr Makin said the financial services arm is “certainly very profitable and we hope to improve our profit margins.”