NatWest to acquire Sainsbury's' banking arm

In addition to acquiring the retail banking assets and liabilities of Sansbury’s' banking businesses, which include outstanding credit cards, unsecured personal loans, and savings accounts, NatWest is set to purchase GBP 2.5 billion of gross customer assets. To break it down, these comprise GBP 1.4 billion unsecured personal loans and GBP 1.1 billion of credit card balances, as well as GBP 2.6 billion of customer deposits. In addition, NatWest is expected to include approximately one million customer accounts.

Moreover, the current move is set to enable Sainsbury's to focus its resources on continuing the growth path of its core retail business and provide improved services to its customers. According to the company’s officials, NatWest’s scale and financial services capabilities aim to ensure that Sansbury’s' existing financial services customers can receive an enhanced customer experience. Also, Sansbury's mentions that its bank customers will not face any immediate change due to the announcement.

The transaction is projected to have a 20 basis point impact on NatWest’s CET1 ratio after completion and be EPS and RoTE accretive following the conclusion of the acquisition. The bank is also entering this transaction via its subsidiary, National Westminster Bank, with the move being conducted through a banking business transfer under Part VII of the Financial Services and Markets Act 2000. Additionally, the completion of the transaction is provisional on court sanction and regulatory approval or non-objection, with customary matters being due to be finalised, including a transitional services agreement.

Furthermore, all the operational infrastructure and commission income businesses of Sainsbury’s' banking arm, such as ATMs, insurance, and travel money, are not part of the transaction, as well as Argos Financial Services. Representatives from NatWest underlined that the transaction supports the acceleration of the expansion of its Retail Banking business, with the move following the bank’s development strategy. Besides a complementary customer base, the announcement is projected to provide scale to NatWest’s credit card and unsecured personal lending business within existing risk appetite.

The deal is expected to be completed by the end of March 2025, with Sainsbury’s' banking arm being set to pay out GBP 125 million to NatWest and GBP 250 million to Sainsbury’s as part of the transaction.

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