M&S is close to finalising an agreement with one of the UK’s largest high street banks to revamp its banking division into a financial services and loyalty ‘superapp’.
The retail giant and HSBC, whose UK arm owns M&S Bank, are close to making a new long-term relationship agreement that will set the stage for an overhaul of the business, Sky News reports.
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Sources told Sky News that the long-running talks between M&S and HSBC have been primarily centered on reaching an agreement before their current contract expires in the upcoming weeks.
One said that a public announcement was expected to be made about elements of the revamped partnership next month.
They stated that M&S’s ultimate goal is to create a comprehensive ‘superapp’ that integrates payments, financial services, and the retailer’s Sparks loyalty program.
One possibility could entail the retailer acquiring a stake over time, though the probability of this remained uncertain over the weekend.
Investment banking boutique Fenchurch Advisory Partners has been advising M&S on the talks.
The new deal, which is expected to run for seven years, will dismiss any notion of M&S mirroring rival grocers Sainsbury and Tesco in withdrawing from the financial services sector.
Currently, under the existing agreement, M&S holds a 50% stake in the bank’s profits, with specific deductions applied.
It remained uncertain on Saturday whether adjustments to the profit-sharing arrangement would be included in the new contract.
Back in January, Sainsbury’s said it would be exiting the banking sector after nearly three decades, with advisers currently exploring opportunities to divest portions of the division on behalf of the supermarket.
While last month, Tesco said it would sell its bank to Barclays in a deal worth an initial £600m.
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