Sainsbury’s offloads banking business to NatWest

Sainsbury’s has announced it will sell its core banking business to NatWest.

The move follows an announcement by the supermarket in January in which it revealed plans to withdraw from the banking sector.

As part of the agreement, NatWest will take over the retailer’s personal loan, credit card and retail deposit portfolios.

The supermarket said the transaction does not include its commission income businesses, including insurance, ATMs and travel money as these are “capital-light and profitable” businesses which have a strong connection to Sainsbury’s retail offering.

Argos Financial Services is also excluded from the sale, with Sainsbury’s saying it will provide an update on its plans for the business at a future date.

The deal is expected to complete by March 2025.

Sainsbury’s said the sale will allow it to focus its time and resources on growing the core retail business.

Sainsbury’s Bank will return “at least” £250 million of excess capital to the retailer once the deal is complete, with the company intending to return this to shareholders.

Sainsbury’s said that customers will see no immediate change as a result of the takeover.

“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," said Simon Roberts, chief executive of Sainsbury's.

"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.”

In February, Tesco reportedly launched a formal review into its presence in the financial services sector which could trigger a formal sales process of Tesco Bank.

A financial analyst told Sky News that the bank could be worth more than £1 billion based on its book value.

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