£464m deal

Sainsbury’s sells mortgage book to Co-op Bank

Mortgage sale will ‘simplify’ Sainsbury’s Bank

The Co-operative Bank has agreed a £464m cash deal to buy Edinburgh-based Sainsbury’s Bank’s mortgage portfolio.

Sainsbury’s said the sale would help simplify its banking business – and comes four years after it announced plans to stop all new mortgage sales and review the business.

Jim Brown, CEO of Sainsbury’s Bank said: “Closing the chapter on our mortgage offering is a big step in simplifying our business.”

Sainsbury’s said the gross asset value of the mortgage book as at 30 April was £479 million and the portfolio had provided around £4m in profits in the last financial year.

The deal is expected to complete alongside the transfer of beneficial ownership on 15 August.

Following a period of transition of up to one year from completion, Sainsbury’s Bank mortgage customers will transfer to The Co-operative Bank.

Proceeds from the deal will be used to help optimise the overall cost of funding for Sainsbury’s Bank.

Nick Slape, chief executive of Co-op Bank, said: “Once the transfer activity is complete, we look forward to welcoming the new customers who will benefit from our ambitious new technology platform, which will simplify our banking services and will make us more efficient, giving us the flexibility to introduce new products and services.

“This transaction, our first portfolio acquisition in more than a decade, further demonstrates the progress we have made in recent years and our strength in what remains a competitive UK mortgage market.”

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