NatWest has struck a deal to acquire most of the banking business of UK retailer Sainsbury's, in a deal set to grow the British lender's assets by £2.5 billion (€2.96 billion).
The first major transaction executed by CEO Paul Thwaite since formally taking the role last year will also see its customer accounts rise by around one million, in line with the lender's strategy to ramp up its retail banking business.
The deal is the latest banking business disposal by a major British retailer, after rival supermarket chain Tesco offloaded most of its banking activities to Barclays in a £600 million (€710.2 million) deal earlier this year.
Customer Focus
"NatWest's values and customer focus are a close fit with ours and as one of the UK's leading banks, NatWest's scale and financial services expertise will ensure our existing financial services customers continue to be well looked after," commented Simon Roberts, Sainsbury's CEO.
"There will be no immediate change for our bank customers as a result of this announcement. Today's news means we will focus all our time and resources going forward on growing our core retail business, delivering great quality and value, week in week out."
The assets acquired include £1.4 billion (€1.66 billion) in unsecured personal loans, £1.1 billion (€1.30 billion) in credit card balances, along with around £2.6 billion (€3.08 billion) of customer deposits.
Closing The Deal
The deal is expected to close on in March 2025 and NatWest will receive an agreed £125 million (€148 million) consideration payment from Sainsbury's at completion.
"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," NatWest's Thwaite added. "NatWest Group has a strong track record of successful integration, and we are focussed on ensuring a smooth transition for customers."
This transaction is expected to have a 20 basis point impact on NatWest's core capital ratio.
Additional reporting by ESM
