Sainsbury’s ends talks on sale of bank division
The bank’s headquarters at Edinburgh Park
Sainsbury’s said it is no longer in talks over the sale of its Edinburgh-based bank.
In a statement to the market the supermarket group said it had received some expressions of interest in a possible acquisition but talks had now ended.
“Whilst the board of Sainsbury’s believe that it was in the best interests of shareholders to explore these expressions of interest, it has concluded that these do not offer better value for shareholders than will be realised through retaining Sainsbury’s Bank. Accordingly, all such discussions have now ended,” it said.
“We continue to make progress strengthening and simplifying our financial services business in line with our strategy and we remain comfortable with consensus profit forecasts for the division”.
The bank was understood to be in talks with US private equity group Centerbridge Partners which wanted to use the Sainsbury’s brand under a licensing agreement as a platform to buy other banking operations in the UK.
A deal could have been worth about £200 million and followed months of speculation that has linked the business with a number of potential suitors including NatWest (RBS) Group.
The supermarket chain kicked off an auction of the division a year ago and followed Tesco’s decision to scale back its banking interests. Tesco Bank, also based in Edinburgh, sold its mortgage book and recently announced that it was pulling out of the current account market.
Sainsbury’s Bank has about two million customers, offering home insurance and credit cards.
It pulled out of the mortgage market in 2019 because of the impact of ultra-low interest rates on the profitability of smaller lenders.