REG - Sainsbury(J) PLC - Sainsbury’s Bank sells mortgage portfolio

J SainsburyAnnouncement

11/08/2023 15:00

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RNS Number : 1238J  Sainsbury(J) PLC  11 August 2023

11 August 2023

 

Sainsbury's Bank confirms sale of mortgage portfolio to The Co-operative Bank

 

J Sainsbury plc ("Sainsbury's") today confirms that Sainsbury's Bank plc
("Sainsbury's Bank") has agreed to sell its mortgage portfolio to The
Co-operative Bank p.l.c. ("The Co-operative Bank") for a cash consideration of
around £464 million*, payable at completion. The gross asset value of the
mortgage book at 30 April 2023 was £479 million (£467 million net asset
value after hedging).  The sale follows the September 2019 announcement by
Sainsbury's Bank that it would be stopping all new mortgage sales and was
reviewing options for the existing mortgage book.

 

The deal is expected to complete alongside transfer of beneficial ownership on
15 August 2023, with legal title transfer occurring within 12 months.
Following a period of transition of up to one year from completion,
Sainsbury's Bank mortgage customers will transfer to The Co-operative Bank.

 

Sainsbury's Bank intends to use the proceeds from the transaction to help
optimise the overall cost of funding for Sainsbury's Bank.

 

In the year ended 28 February 2023 the associated direct profit contribution
of the mortgage portfolio was £4 million**.

 

Commenting on the sale, Jim Brown, CEO of Sainsbury's Bank said: "We're
pleased to confirm we have agreed the sale of our mortgage book to The
Co-operative Bank. Closing the chapter on our mortgage offering is a big step
in simplifying our business.

"It's been really important throughout the process that we find a buyer that
will best meet the needs of our customers. We chose The Co-operative Bank as
it's a well-known UK mortgage provider, committed to providing excellent
customer service, so we are confident that The Co-operative Bank will serve
our customers well.

"The sale of the mortgage book will support our strategy to reshape our
portfolio and focus on offering capital and cost efficient, mobile-led
financial services to loyal Sainsbury's and Argos customers."

Nick Slape, CEO of The Co-operative Bank said: "We are delighted to have
agreed this transaction with Sainsbury's Bank. Once the transfer activity is
complete, we look forward to welcoming the new customers who will benefit from
our ambitious new technology platform, which will simplify our banking
services and will make us more efficient, giving us the flexibility to
introduce new products and services.

"This transaction, our first portfolio acquisition in more than a decade,
further demonstrates the progress we have made in recent years and our
strength in what remains a competitive UK mortgage market."

Deloitte advised Sainsbury's Bank on the sale.

Enquiries

Investor Relations: James Collins +44 (0) 20 7695 0080

Media: Rebecca Reilly +44 (0) 20 7695 7295

 

 

* the exact size of the portfolio and consideration payable will depend on
movements in the portfolio up to completion

** profit contribution stated after removing a one off COVID related release
of expected credit loss provision of £2 million, before the allocation of any
central overheads and before tax.

 

 

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