Thursday 12 December 2019 2:38 pm

Takeover interest mounts over Sainsbury's £1.9bn mortgage book

Grocery giant Sainsbury’s has reportedly received several offers for its £1.9bn mortgage book.

The Big Four supermarket chain has attracted a number of bidders as it looks to quit the home-loans market, according to Sky News.

The broadcaster said that Lloyds Banking Group is understood to be among the interested parties in the auction, which is being handled by BNP Paribas.

Read more: Moody’s downgrades outlook for European banks


Major banks such as the Royal Bank of Scotland (RBS) and Santander UK, which have previously shown interest in similar sale processes, did not reportedly table proposals.

In June Sainsbury’s drafted in former RBS executive Jim Brown as its head of financial services amid efforts to turn around the unit’s profitability.

The grocer said that income in its banking division had been “broadly flat” in its half-year results.

Speculation over the deal comes several months after Lloyds Banking Group snapped up Tesco Bank’s £3.7bn UK residential mortgage portfolio.

Tesco said in the summer that its banking unit would stop mortgage lending, as it blamed an increasingly competitive market for hitting profits in the sector.

Read more: Sainsbury’s signs wholesale deal

“The sale is in line with Tesco Bank’s strategy of focusing on a reduced number of products and services that serve the broad range of Tesco customers, and will reduce operating and funding costs,” Tesco said at the time.


A Sainsbury’s Bank spokesperson said: “As announced in September, we have stopped issuing new mortgages and are exploring options for the existing book.

“One option is to sell the book and we are exploring this option with interested parties.  We emphasise that this is only one of the possible options.”

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