// Sainsbury’s explores a sale option for its banking arm
// New Sainsbury’s CEO Simon Roberts is probing potential buyers of the bank
Sainsbury’s has reportedly begun exploring a sale of its banking arm it launched in 1997, as low interest rates reduce its prospects of making a recovery from the business.
The Big 4 grocer’s new chief executive Simon Roberts, who took the helm earlier this year, is probing potential buyers of the bank, which holds more than two million customers across a range of products including mortgages, home insurance and credit cards.
Roberts has asked UBS, its corporate broker and financial adviser, to advise it on options for Sainsbury’s Bank, Sky News reported.
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Sainsbury’s put a deal to sell its £1.9 billion mortgage book to Nationwide on hold due to the Covid-19 pandemic.
It said it will not inject further capital into Sainsbury’s Bank.
Sainsbury’s will be publishing its half-year results next week, placing pressure on Roberts to explore options for the bank.
The supermarket is considering the sale of a stake in the bank to a larger high street lender, rather than an outright sale of the business.
It remains uncertain as to whether other alternatives such as closing the banking operations are being considered.
Sainsbury’s took full control of the division in 2013, when it paid £260 million to buy a 50 per cent shareholding from joint venture partner Lloyds Banking Group.
Meanwhile, Tesco and the Co-op Group have also built a presence in the banking market.
However, Tesco pulled out of the mortgage market last year, selling its £3.8 billion book to Lloyds.
Earlier this year, Sainsbury’s Bank said its chairman Roger Davis would step down from his role, but a successor is yet to be found.