Sainsbury’s share price: Group completes purchase of Sainsbury’s Bank

on Feb 3, 2014
Updated: Apr 9, 2020
Listen

iNVEZZ.com, Monday, February 3: J Sainsbury (LON:SBRY) has taken full ownership of its eponymous bank, Britain’s third largest supermarket group announced today.

In May 2013, Sainsbury’s revealed that it had agreed to pay Lloyds Banking Group (LON:LLOY) £248 million for the remaining 50 percent of Sainsbury’s Bank the grocer did not already own. In a statement released this morning, Sainsbury’s confirmed that the transaction was settled on Friday last, January 31, with the bank now a wholly-owned subsidiary of Sainsbury’s and to be fully consolidated in the group accounts.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Sainsbury’s Bank was formed 16 years ago as a joint venture between Sainsbury’s and Bank of Scotland. In 2007, it became a 50:50 joint venture with Halifax Bank of Scotland, later Lloyds Banking Group.

The bank has about 1.5 million active accounts and offers a range of banking products exclusively to retail customers, including credit cards, savings, personal loans, general insurance and travel funds.

At the time of the buy-out agreement with Lloyds, Sainsbury’s said that developing services complementary to its existing supermarket business was a core part of its long-term strategy for growth.
It added that full ownership of the bank would allow future products to be more closely tailored to Sainsbury’s customers, using Nectar card data to drive sales in both financial services and the core supermarket business.

Last May, CEO Justin King, who just last week announced his departure from the grocer (Sainsbury’s share price slumps on CEO departure), said: “This is an exciting transaction for Sainsbury’s which has the potential to deliver significant benefits to our shareholders, customers and colleagues. We see a great opportunity to increase the number of bank customers by offering accessible, high quality financial services products which reward customers who bank and shop with us.”

***Sainsbury’s in the crossfire of recovering Tesco***
Sainsbury’s announced last week that Mike Coupe, group commercial director, is to replace Justin King as CEO. And according to analysts, Coupe’s biggest challenge will be the threat from a trading recovery at Tesco (LON:TSCO).
Last month, Britain’s largest supermarket chain reported Christmas trading towards the lower end of expectations (Tesco share price plunges on festive sales slump), but an improvement may well be in sight.

According to Bryan Roberts, an analyst at the Kantar Retail consultancy, Tesco will pour money and effort into spurring a recovery this year. “The main challenge for [new CEO] Coupe is that Sainsbury’s is firmly in the crossfire of a recovering Tesco… Tesco’s scale and the depth of its pockets is really intimidating.”
Roberts’ conclusion: “If Tesco can push the right buttons on quality and service then Sainsbury’s arguably has the most to lose.”
The supermarket chain’s most recent trading quarter saw sales growth of just 0.2 per cent, its slowest rate in nine years (Sainsbury’s share price shaky after Q3 trading update).
And Sainsbury’s stock is down more than six percent since it’s the Q3 performance report.
So far today though, Sainsbury’s stock has gained 0.20 percent, to be at 345.58p as of 08:38 UTC. As of the same time, Tesco’s share price was 319.70p, 0.20 percent down on the day.
**As of 08:26 UTC, buy Sainsbury’s shares at 345.90p.**
**As of 08:26 UTC, sell Sainsbury’s shares at 345.60p.**
**As of 08:27 UTC, buy Tesco shares at 319.95p.**
**s of 08:27 UTC, sell Tesco shares at 319.70p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals™.

0/10
Learn more
Finance & Banking Retail Stock Market