Sainsbury’s is reportedly looking to sell its Edinburgh-based banking arm, as low-interest rates reduce its prospects of making a return from the business.
According to Sky News, the retailer’s new chief executive, Simon Roberts, is in discussions with potential buyers of the division, which was launched in 1997 and holds more than two million customers across a range of products including mortgages, home insurance and credit cards.
It is reported that Mr Roberts had asked UBS, its corporate broker and financial adviser, to advise it on options for Sainsbury’s Bank.
Near-zero interest rates and price competition are said to be putting pressure on margins.
Sainsbury’s put a deal to sell its £1.9bn mortgage book to Nationwide on hold due to the coronavirus pandemic, and has said it will not inject further capital into Sainsbury’s Bank.
Sainsbury’s took over the division in 2013, when it paid £260m to buy a 50 per cent shareholding from joint venture partner Lloyds Banking Group.