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NatWest is to buy most of Sainsbury’s banking business in a deal that accelerates the supermarket sector’s exit after a failed push into financial services.
In a statement on Thursday, NatWest said it had agreed to buy £2.5bn of assets including unsecured loans and credit card deposits and £2.6bn of liabilities from the supermarket chain.
The deal does not include Sainsbury’s Bank’s cash machine, insurance and travel money business or Argos Financial Services. Sainsbury’s will pay NatWest £125mn as part of the deal.
NatWest chief executive Paul Thwaite described the deal as “a great opportunity to accelerate the growth of our retail ranking business at attractive returns, in line with our strategic priorities”.
He added: “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.”
Sainsbury’s chief executive Simon Roberts said: “Today’s news means we will focus all our time and resources going forward on growing our core retail business.”
The deal is expected to complete in the first half of 2025.
Sainsbury’s said it expected to return £250mn to shareholders “once the phased withdrawal from its Core Banking Business has been completed and the future model for Argos Financial Services is in place”.
In February, Barclays agreed to buy most of Tesco Bank’s assets in a £600mn deal.
