Sainsbury’s mulls sale of banking arm to Centerbridge

J Sainsbury is reportedly mulling the sale of its banking arm to US-based private equity firm Centerbridge Partners for a deal worth approximately £200m.

According to Sky News, the supermarket chain is “within weeks” of reaching an agreement with Centerbridge almost one year after commencing the auction of the business.

Through the transaction, the publication claimed that Centerpoint would acquire Sainbsury’s Bank outright, while continuing to use the Sainbury’s brand under a licensing agreement.

While Sainsbury’s Bank ceased its trading in the mortgage market in 2019, the group continues to serve two million customers with a range of products including home insurance and credit cards.

Sainsbury’s took full control of the business in 2013 through a £260m buyout of Lloyds Banking Group’s joint stake in the venture, but has reportedly since said it will not inject further capital into the department.

As for Centerpoint, the group has previously backed the mid-sized lender Aldermore in its aim to acquire Williams and Glyn, a branch network that RBS, now NatWest Group, was ordered to dispose of.

Despite the deal falling through, Williams and Glyn was at the time run by Jim Brown, who currently acts as CEO at Sainsbury’s Bank.

The supposed negotiations come as private equity firms are said to be showing an interest in the Sainsbury’s brand as a whole. A number of companies, including Apollo Global Management and Fortress Investment Group, are reportedly mulling a £7bn takeover of the supermarket chain.

Retail Sector has contacted Sainsbury’s for further comment.