Wed, 04 Nov 2020 | DIVISION SALE
The new Sainsbury's boss has reportedly begun exploring the possible sale of its banking arm as the impact of low interest rates takes its toll.
The bank was launched in 1997 and has more than two million customers across its range of banking services. But according to the Big 4 supermarket, new CEO Simon Roberts is searching for potential buyers as near-zero interest rates and price competition continue to worry medium-sized banks across the country.
Mr Roberts has reportedly asked corporate broker and financial adviser UBS to advise on the options available to the bank, which offers products including mortgages, home insurance and credit cards. He is likely to be under increased pressure ahead of the publishing of the company's half-year results next week.
It is thought that the company aims to sell a stake of the banking division to a larger high street lender rather than considering a an outright sale, although it's believed that other options are still on the table.
Sainsbury's initially took full control of the banking division in 2013, having paid £260 million to purchase a 50 per cent shareholding from joint venture partner Lloyds Banking Group.
Earlier this year, Sainsbury's put its plans to sell its £1.9 billion mortgage book to Nationwide on hold following the outbreak of coronavirus. Former RBS executive Jim Brown, who was hired by to run Sainsbury's Bank last year also stated that the division wouldn't inject any further capital into the banking arm.
Sainsbury's is yet to comment on the potential division sale. A spokesperson for Sainsbury’s said: "We do not comment on speculation. We remain focused on delivering against the five year plan we set out at our Capital Markets Day last September."
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