NatWest Group has agreed to acquire most of the banking business of Sainsbury’s in a deal that would increase the bank’s assets by £2.5 billion.
Sainsbury’s Bank will pay NatWest Group £125 million as part of the deal.
NatWest also said it will close its business in Poland by the end of 2025, cutting about 1,600 staff, as it consolidates its financial crime business into two remaining hubs in Britain and India.
“Natwest Group plc today announces that it has entered into an agreement with Sainsbury’s Bank plc to acquire the retail banking assets and liabilities of Sainsbury’s Bank which comprises its outstanding credit card, unsecured personal loan and saving accounts,” said NatWest, formerly known as RBS.
“NatWest Group expects to acquire approximately £2.5 billion of gross customer assets, comprising £1.4 billion of unsecured personal loans and £1.1 billion of credit cards balances, together with approximately £2.6 billion of customer deposits.
“As part of the transaction NatWest Group also expects to add around one million customer accounts.”
NatWest Group CEO Paul Thwaite 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.”
Sainsbury’s CEO Simon Roberts 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.”
NatWest said the operational infrastructure and commission income businesses of Sainsbury’s Bank including ATMs, insurance and travel money are not included in this transaction. Argos Financial Services is also not included in this transaction perimeter.
“Forecast balance sheet and account values disclosed are at completion which is assumed to be 31 March 2025,” said NatWest.
“Under the terms of the transaction, the gross customer assets and liabilities and associated cash at completion will transfer to NatWest Group and an agreed £125m consideration will be payable from Sainsbury’s Bank to NatWest Group.
“The forecast utilises values which are based on management information provided by Sainsbury’s Bank. Actual gross customer assets, balances and customer accounts to be acquired may vary at completion.
“The final consideration will reflect the value of assets and liabilities transferred at completion of the transaction and will be subject to certain customary adjustments.”