In a landmark move set to reshape the UK banking landscape, NatWest is poised to acquire the retail banking assets and liabilities of Sainsbury’s Bank, the financial arm of the renowned supermarket chain.
Sainsbury’s had previously announced in January its plans to wind down its banking division, having already sold its mortgage book to the Co-operative Bank over the summer. This latest deal with NatWest involves the acquisition of approximately £2.5 billion in gross customer assets, which includes £1.4 billion in unsecured personal loans and £1.1 billion in credit card balances. Additionally, NatWest will take on approximately £2.6 billion in customer deposits.
This strategic acquisition will see NatWest adding around one million customer accounts to its portfolio. The deal also includes a £125 million payment from Sainsbury’s upon completion, expected in the first half of 2025.
Paul Thwaite, CEO of NatWest Group, stated, “This transaction presents a prime opportunity to accelerate the growth of our Retail Banking business at attractive returns, aligning with our strategic priorities. The complementary customer base and added scale to our credit card and unsecured personal lending business will enhance our existing risk appetite. NatWest Group has a robust track record of successful integrations, and we are dedicated to ensuring a seamless transition for customers.”
Following the deal, Sainsbury’s will shift its focus to offering financial services products through third-party affiliations, mirroring its strategy within the insurance sector.
This acquisition signals a broader trend of consolidation among smaller lenders in the UK banking market, amidst the gradual exit of supermarket operators from the industry. Earlier this year, Barclays struck a deal to acquire most of Tesco Bank’s operations for £700 million.
For more details, visit NatWest and Sainsbury’s Bank.