British retail giant Sainsbury’s has announced that it will be selling the majority of its banking business to NatWest, a high street lender. This acquisition will bring approximately one million new accounts to NatWest, as well as £2.5bn in gross customer assets. This includes £1.4bn in unsecured personal loans and £1.1bn in credit card balances, as well as £2.6bn in customer deposits.
The sale is expected to be completed in the first half of 2025. Sainsbury’s has assured its banking customers that they will not need to take any action and that there will be no immediate changes to their terms and conditions. This decision comes after Sainsbury’s announced in January that it would be winding down its banking division to focus on its retail operations.
Upon completion of the deal, NatWest will receive approximately £125m from Sainsbury’s to take on its core banking assets and liabilities. In addition, the supermarket giant estimates that it will return at least £250m in excess capital to its shareholders. CEO Simon Roberts stated, “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.”
NatWest boss Paul Thwaite also expressed enthusiasm for the acquisition, saying, “This transaction is a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities.” He added that the deal will not only bring a complementary customer base, but also add scale to their credit card and unsecured personal lending business.
It should be noted that the sale does not include Sainsbury’s Bank’s commission income businesses, such as insurance, cash points, and travel money. Argos Financial Services is also not included in the deal. This announcement comes after Sainsbury’s competitor Tesco announced earlier this year that it would be selling the majority of its banking arm to Barclays, in a deal worth up to £1bn.
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