Sainsbury's: supermarket bank business in Natwest sale news - what it means for money and loan customers

• Sainsbury's has agreed to sell most of its banking business to NatWest
• It comes after Sainsbury's January announcement to focus on its core retail business
• Sainsbury’s banking customers will see no immediate changes to their terms and conditions
• The sale will enable Sainsbury’s to return at least £250 million to shareholders

Supermarket chain Sainsbury's has reached an agreement to sell the majority of its banking business to NatWest.

The move will add approximately one million customer accounts to the lending giant's portfolio, as well as £1.4 billion in unsecured personal loans, £1.1 billion in credit card balances and around £2.6 billion in customer deposits.

It follows Sainsbury's announcement in January that it is to scale back its banking operations to concentrate on its core retail business. Similarly, rival Tesco transferred most of its banking activities to Barclays in a £600 million deal earlier this year.

Simon Roberts, chief executive of Sainsbury’s, said: “Today’s news means we will focus all our time and resources going forward on growing our core retail business.”

But what does the move mean for customers, and will it affect their terms and conditions? Here is everything you need to know.

How will the deal affect Sainsbury’s banking customers?

The deal is expected to go through in March of 2025, and customers are expected to be transferred to NatWest in the first half of the calendar year.

Sainsbury’s has said there would be no immediate changes to its banking customers’ terms and conditions, adding they “do not need to take any action”. More information on the transfer will be sent “in due course”.

Roberts said: “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.”

Sainsbury’s has added that the sale does not include the Sainsbury’s Bank’s commission income businesses, such as insurance, cash points and travel money. Argos Financial Services is also not included in the deal.

What does it mean for shareholders?

While the move should have minimal impact on customers, behind the scenes, shareholders and bankers are set to benefit.

Sainsbury’s will pay NatWest £125 million when it completes to take on its core banking assets and liabilities, although the final consideration will be confirmed on completion.

Sainsbury’s said it expects to return at least £250 million in excess capital to shareholders after the deal.

Paul Thwaite, NatWest Group chief executive, said: “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,” he added.

How do you feel about Sainsbury's decision to focus on retail? What impact do you think it will have on customers? Share your thoughts and join the conversation in the comments section.