Natwest Group plc (LON:NWG) today announces that it has entered into an agreement with Sainsbury’s Bank plc (LON:SBRY) to acquire the retail banking assets and liabilities of Sainsbury’s Bank which comprises its outstanding credit card, unsecured personal loan and saving accounts.
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.
Paul Thwaite, NatWest Group CEO, commented:
“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.”
Simon Roberts, Sainsbury’s CEO, commented:
“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.”
This transaction is expected to have a 20 basis point impact on NatWest Group’s CET1 ratio upon completion and be EPS and RoTE accretive upon completion.
Additional information
· NatWest Group is entering into this transaction through its subsidiary, National Westminster Bank plc.
· The transaction will be effected through a banking business transfer under Part VII of the Financial Services and Markets Act 2000.
· Completion of the transaction is conditional on court sanction and regulatory approval or non-objection. Before completion, customary completion matters are due to be finalised, including a transitional services agreement. Subject to this, completion is expected to occur during the first half of 2025.
· 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. 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.
· There is no immediate change for our new customers and they will be contacted in due course.
