Sainsbury's sells core banking unit to NatWest
Updated : 07:54
Sainsbury's has announced it is selling its core banking business, comprising £2.5bn of outstanding credit card, unsecured personal loan and saving accounts, to NatWest and plans to return a tenth of that amount to shareholders.
The deal will give NatWest around one million additional customer accounts, while allowing Sainsbury's to focus "all our time and resources going forward on growing our core retail business", according to the supermarket's chief executive Simon Roberts.
The £2.5bn of gross customer assets are made up of £1.4bn of unsecured personal loans and £1.1bn of credit cards balances, with NatWest also taking on £2.6bn of customer deposits.
The sale does not include Sainsbury's Bank's commission income businesses, including insurance, ATMs and travel money, which are capital-light divisions "with a strong connection to Sainsbury's core retail offer".
Sainsbury will also keep Argos Financial Services, though a further update on its plans for this business is expected at a future date.
Once a future model fro AFS is in place and the core banking business sale has completed, Sainsbury's intends to return £250m to shareholders.
"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," Roberts said.
There will be no immediate change for Sainsbury's Bank customers as a result of the deal, and customers do not need to take any action. They are expected to be transferred to NatWest in the first half of 2025.
Meanwhile, NatWest's chief executive Paul Thwaite said: "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"