M&S is in talks to create a banking and loyalty cars “superapp” as part of a huge business overhaul.
The retailer and HSBC, which owns M&S Bank, are close to announcing a new long-term relationship agreement, according to Sky News.
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M&S Bank currently offers credit cards, personal loans, travel insurance, store payment cards and a buy now pay later credit to over three million UK customers.
Sources have now said that long-running talks between M&S and HSBC have focused on concluding a new deal for the brand before the current partnership agreement expires in the coming weeks.
Fenchurch Advisory Partners, an investment banking boutique, has been advising M&S on the talks.
Sources say that M&S Bank could launch a combined banking and loyalty card “superapp” as part of the new deal.
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However, M&S and HSBC declined to comment on the move.
M&S Bank used to offer current accounts prior to 2021.
However, the bank closed this product offering on August 31, 2021, in a shock move that also resulted in the closure of all 29 in-store bank branches on July 2 of the same year.
Since the shake-up, the bank has completely shifted its focus to credit cards, insurance and reward offerings.
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The renewed partnership with HSBC will expel rumours that M&S Bank could follow Sainsbury’s and Tesco, which in recent weeks have sold their banking arms.
In January, Sainsbury’s announced it would wind down its banking division, Sainsbury’s Bank, as part of plans to focus on retail.
Major supermarket bank with over five million customers SOLD to Barclays
Meanwhile, Tesco said last month that it would sell its bank to Barclays in a deal worth an initial £600m.
In other news, thousands of M&S banking customers have been offered compensation after facing eight-week delays, The Sun revealed last month.
It is understood a large number of M&S customers who applied for credit cards over the last few months were left waiting up to two months to hear back.
The banking arm of the high street giant has been inundated with credit card applications since November last year.
M&S Bank has some of the most competitive 0% credit card offers in the UK.
However, a surge in recent applications is understood to have created a backlog, leaving thousands of customers waiting months to hear whether their application was approved.
The delays meant many households were left in the lurch over the Christmas period.
This is because when you apply for a credit card, you shouldn’t apply for another one straight away as each application leaves a “hard search” on your credit report which can damage your credit score – particularly if you then don’t get accepted.
M&S Bank is now contacting affected customers to apologise and offer them compensation for the long delays.
Plus, the lenders announced last week that Virgin Money agreed to a takeover by Nationwide Building Society in a £2.9billion deal.
Nationwide said the merger would enable the company to provide members with a wider range of products and services.
Virgin Money has around 6.6million customers in the UK and 91 branches, while Nationwide has 16million members and 686 branches.
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While the details are yet to be finalised, the deal would allow the two brands to run as separate entities. The Virgin Money brand would be retained for six years before rebranding as Nationwide.
No branch closures are expected to be announced.
