NatWest Group to acquire Sainsbury’s Bank’s retail assets

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NatWest Group has announced it has entered into an agreement to acquire the retail banking assets and liabilities of Sainsbury’s Bank.

As part of the transaction, NatWest Group expects to acquire approximately £2.5bn of gross customer assets, comprising £1.4bn of unsecured personal loans and £1.1bn of credit card balances, along with approximately £2.6bn of customer deposits. Additionally, the acquisition is anticipated to include around one million new customer accounts.

Paul Thwaite, CEO of NatWest Group, commented: “Following today’s announcement, we look forward to welcoming new customers to NatWest Group, where they will benefit from our expertise and award-winning digital banking offering. 

“This transaction is a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities. 

“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 Group has a strong track record of successful integration, and we are focussed on ensuring a smooth transition for customers.”

NatWest Group, through its subsidiary National Westminster Bank, is proceeding with a transaction under the Financial Services and Markets Act 2000. Completion depends on court approval and regulatory clearance, expected by the first half of 2025. Before finalising the deal, standard matters including a transitional services agreement will be settled.

The transaction excludes Sainsbury’s Bank’s operational infrastructure, commission income businesses (like ATMs, insurance and travel money) and Argos Financial Services. Forecasted balance sheet and account values are based on Sainsbury’s Bank’s information as of the assumed completion date of 31 March 2025.

Upon completion, NatWest Group will acquire gross customer assets and liabilities, along with associated cash, for an agreed consideration of £125m from Sainsbury’s Bank. The final payment will be adjusted based on the actual values transferred.

Sainsbury’s Bank has stated that new customers will not experience immediate changes and will be contacted in due time.

Simon Roberts, CEO of Sainsbury’s, said: “I am pleased to be announcing this news today. 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. 

“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.”

This news follows the ongoing trend in the UK retail banking sector, where Sainsbury’s, one of the country’s largest supermarket and retail chains, announced its intention to scale back its banking services in January.