Sainsbury’s sells banking business to NatWest

Sainsbury’s has agreed to sell its core banking business to NatWest in a deal that the pair expect to complete in the first half of next year.

The move follows an announcement in January by Sainsbury’s that it was considering a phased withdrawal from its core banking arm, Sainsbury’s Bank, which covers its personal loan, credit card and retail deposit portfolios.

NatWest’s transaction will not include Sainsbury’s Bank’s commission income businesses, including insurance, ATMs and travel money. These are capital-light and profitable businesses with a “strong connection to Sainsbury’s core retail offer”, the group said.

Argos Financial Services is also not included in the deal, but Sainsbury’s revealed it would provide a further update on its plans for this business “at a future date”.

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

“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,” Sainsbury’s CEO, Simon Roberts.

“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.”

NatWest is expecting to acquire approximately £2.5bn of gross customer assets, comprising £1.4bn of unsecured personal loans and £1.1bn of credit cards balances, together with around £2.6bn of customer deposits.

As part of the deal, NatWest also expects to add around one million customer accounts.

NatWest CEO, Paul Thwaite, added: “This transaction is a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities. 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 has a strong track record of successful integration, and we are focussed on ensuring a smooth transition for customers.”



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.

Air and the role of later-life lending
Content editor at MoneyAge, Dan McGrath, spoke to the chief executive officer at Air, Will Hale, about the later-life lending industry, the importance of tailored advice and how technology and obligations have shaped the sector.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.