Sainsbury's, the supermarket giant, has announced its plans to wind down its banking division, Sainsbury's Bank, and focus on its retail business. The closure of the banking business could result in products like credit cards, loans, and savings accounts being outsourced to other providers. However, Sainsbury's assures its current and future customers that there will be no immediate changes to their products and services. This move follows a trend of supermarkets reconsidering their banking services, with Tesco and Metro Bank also reviewing their options. The closure of Sainsbury's Bank reflects the increasing popularity of online banking and the cost-cutting measures adopted by banks and building societies.
Phased Withdrawal and Outsourcing of Services
Sainsbury's Bank will undergo a phased withdrawal from the banking business, although no specific timeline has been provided. The supermarket giant is exploring various options, including outsourcing credit cards, loans, and savings accounts to other providers. Currently, Sainsbury's Bank already outsources its insurance products, as well as Argos credit cards and loans to approximately 2.1 million customers. Sainsbury's emphasizes that there will be no immediate changes for its current or future customers, including those using Argos' financial services.
Retirement of Sainsbury's Bank CEO
Jim Brown, the chief executive of Sainsbury's Bank, has announced his retirement following the decision to wind down the banking division. Simon Roberts, the chief executive of Sainsbury's, has stated that the closure aligns with the company's strategic focus on its core retail businesses. Sainsbury's Bank assures customers that it will communicate directly with them well in advance of any changes to their products and services.
Background and Ownership
Sainsbury's Bank was founded in 1997 as a joint venture between J Sainsbury PLC and Bank of Scotland, a subsidiary of Lloyds Banking Group. In 2014, Sainsbury's took full ownership of the banking business. Customers can access Sainsbury's Bank services online, over the phone, or through branches located inside Sainsbury's supermarkets. Last summer, Sainsbury's Bank sold its £479 million mortgage book to Co-op Bank.
Impact on Customers and the Banking Industry
Customers should expect no immediate changes as a result of the closure of Sainsbury's Bank. However, the closure reflects a larger trend in the banking industry, with over 190 branches set to close this year. Banks, including Barclays, Lloyds, and the Bank of Scotland, are looking to cut costs and adapt to the increasing popularity of online banking. As supermarkets like Sainsbury's, Tesco, and Metro Bank reconsider their banking services, customers are urged to stay informed about any potential changes to their financial products and services.
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