The second biggest supermarket chain in the UK is selling its banking arm to focus on its core food business.
ADVERTISEMENTSainsbury’s will sell the majority of its banking division to NatWest.
The assets to be taken over by the UK lender include £1.4 billion (€1.6 billion) in unsecured personal loans, £1.1 billion (€1.3 billion) in credit card balances and about £2.6 billion (€3 billion) of customer deposits.
The deal will boost NatWest’s customer numbers by about one million, supporting its strategy to move further into retail banking.
Sainsbury’s Bank brand, its ATMs, insurance and travel money businesses are not part of the agreement. Neither is Argos Financial Services.
Commenting on the decision, Sainsbury’s CEO Simon Roberts said: “NatWest’s values and customer focus are a close fit with ours and as one of the UK’s leading banks, NatWest’s scale and financial services expertise will ensure our existing financial services customers continue to be well looked after.”
“There will be no immediate change for our bank customers as a result of this announcement. Today’s news means we will focus all our time and resources going forward on growing our core retail business, delivering great quality and value, week in week out.”
Sainsbury’s Bank will transfer an additional £125 million (€148 million) to NatWest when the deal is scheduled to be completed in March 2025.
The retailer also hopes to return £250 million (€296 million) to investors after the disposal of its banking arm.
“This transaction is a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities,” said Paul Thwaite, NatWest Group CEO.
“As well as a complementary customer base, the transaction is expected to add scale to our credit card and unsecured personal lending business within existing risk appetite. NatWest Group has a strong track record of successful integration, and we are focused on ensuring a smooth transition for customers.”
The sale comes after Sainsbury’s rival Tesco announced earlier this year that it was offloading the majority of its banking arm to Barclays.
