Sainsbury’s canceled the potential sale of its banking business after concluding discussions with suitors had not resulted in an offer that would be of good shareholder value.
Britain’s second-largest supermarket chain, which began a potential sale process after receiving expressions of interest last November, said it has officially ended talks with all interested parties.
“While the Sainsbury’s Board of Directors believes that it was in the best interests of shareholders to explore these expressions of interest, it concluded that they did not provide better shareholder value than would be realized. by retaining Sainsbury’s Bank, ”the company said. “As a result, all of these discussions are now over. “
The potential sale of the banking operation, which has around 2 million customers and offers products such as credit cards and home insurance, had attracted interest from banking group NatWest as well as US private equity group Centerbridge Partners.
Sainsbury’s said it intended to continue focusing on streamlining banking operations and “remain comfortable” with the profit forecast for the division.
“We continue to make progress in strengthening and simplifying our financial services business in line with our strategy,” the company said.
Sainsbury’s said the bank is on track to achieve an operating profit of £ 26million in the current fiscal year, rising to £ 43million in 2022-2023 and £ 49million in 2023 -2024.
Sainsbury’s Bank was established in 1997 as a joint venture with the Bank of Scotland, which is now part of the Lloyds Banking Group. In 2013, Sainsbury’s decided to take full control of the company in a £ 260million deal.
Tesco, the UK’s largest supermarket chain, sold its mortgage portfolio to Lloyds Banking Group two years ago and is closing all personal checking accounts this year.