Sainsbury’s sells bank to Natwest to focus on food

Sainsbury’s has agreed to sell most of its banking arm to Natwest Group.

The deal, which is expected to be completed in the first of next year, includes £1.4bn of unsecured personal loans, £1.1bn of credit cards balances, and £2.6bn of customer deposits.

The supermarket said it will retain its commission income businesses, including insurance, ATMs and travel money, as “these are capital-light and profitable businesses with a strong connection to Sainsbury’s core retail offer”.

It noted plans for Argos Financial Services, which is not included in the deal, would be provided at a future date.

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Sainsbury’s expects its banking arm to return excess capital of at least £250m once the phased withdrawal from its core banking business has been completed and the future model for Argos Financial Services is in place.

The supermarket said there will be no immediate changes to its banking customers’ existing terms and conditions and they will be transferred to NatWest in the first half of next year.

Sainsbury’s CEO Simon Roberts said: “I am pleased to be announcing this news today. 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.”

The supermarket chain follows in the footsteps of rival Tesco in offloading its core banking services, which announced in February it had sold its banking arm to Barclays in a deal worth up to £600m.



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