Sainbury’s is going to start offering mortgages
Sainsbury's is planning to start offering mortgages as early as next year.
The supermarket confirmed its plans today, on the back of a strong performance from its banking arm.
Underlying profit this year was up nearly five per cent to £65m, while total income was up over five per cent to £274m. The total accounts held by customers now stand at nearly 1.7 million.
"We believe these products will complement our existing financial services portfolio and we expect customers to respond well," the supermarket said.
Sainsbury's said it expected operating profit for the banking arm to be around 10 per cent lower year-on-year due to investment required to enter the mortgage market and the impact of reduced interchange fees.
The planned launch comes alongside Sainsbury's ongoing move onto a "new, more flexible banking platform… which is a key milestone in building a standalone bank and creating long-term shareholder value".
The supermarket said the platform was now built but testing would continue before savings customers were moved over by late summer. Cards and loans customers will be moved over at a later date, having been delayed by the acquisition of Home Retail Group. Total transition costs to remain at the top of the £340m-to £380m range.