Marks & Spencer has become the latest retailer to scale back its banking ambitions after deciding to close all branches and current accounts.

M&S Bank, a partnership with HSBC, has told customers their accounts will shut from this summer, and is axing its 29 in-store branches at the same time.

The chain's financial ambitions date back to 1985, when it joined a scramble by stores to shake up the banking industry and get customers to add financial products to their shopping lists.

M&S had hoped to become a one-stop shop for everything from mortgages to underwear, but stopped offering new home loans last March.

The business blamed the latest banking cuts on the shift to online, particularly since the start of the pandemic, and said it will focus more on credit cards and store rewards. Its in-store travel money desks in some 100 stores are not affected.

Supermarket banks have struggled to compete with big lenders, even after the catastrophic damage to established players' reputations during the 2008 financial crisis.

Sainsbury’s last year put its banking venture up for sale - around the same time that Co-op Bank, which cut historic ties with the wider Co-operative Group following a rescue deal in 2017, also began looking for a buyer.

Tesco sold its mortgage book to Lloyds for £3.8bn in 2019 after saying it would abandon the industry due to tough market conditions.

Sir Philip Hampton, the former chairman of both Sainsbury’s and NatWest, said last year that he could see why it has been difficult for grocers to enter finance. He said one of the reasons is that it is notoriously tough to get people to switch banks, even when they know they should.

He said: "Most people stayed loyal to their long-standing bank [after the 2008 crash]. They hoped and expected the banks to behave better. I think that’s happening."

The likes of Sainsbury’s – which in 1997 became the first supermarket to launch a bank – also branched out into financial services when it made much more business sense to do so.

Bank returns have since been clobbered by record low interest rates, lenders face tough regulatory requirements and costs have spiked.

Sir Philip said: "Banking is much less attractive as a business [now]. Much more capital is needed, there’s tougher regulation, a collapse in margins through low interest rates, [plus] technology and competition challenges."