Major bank with 1.8 million customers sold to NatWest - how it affects you

Sainsbury's has confirmed a deal with high street giant NatWest

Sainsbury's is to sell the bulk of its banking business, including its credit cards, loans and savings accounts, to high street giant NatWest.

The deal will see NatWest take on £1.4billion of unsecured personal loans, £1.1billion of credit card balances and about £2.6billion of customer deposits. Sainsbury’s has agreed to pay NatWest £125million to take on its assets, as part of plans to focus its attention on its retail arm. Sainsbury's Bank has around 1.8million customers.

The deal is expected to go through in March next year. Sainsbury's said there would be no immediate changes for customers, adding they “do not need to take any action”. The sale does not include 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.

Simon Roberts, Sainsbury’s CEO, 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.”

Paul Thwaite, NatWest Group CEO, said: “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.”

It comes after Sainsbury’s announced in January it was winding down its banking division - but it isn't the only supermarket to have pulled out of the financial sector. Tesco sold most of its banking activities to Barclays in a £600million deal earlier this year, in move affecting five million customers.