A SUPERMARKET giant is set to close its banking business with 1.9million customers.
Sainsbury’s has announced it will wind down its banking division – known as Sainsbury’s Bank – as part of plans to focus on retail.
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It comes as part of the grocer’s plan to focus on “food first”.
Sainsbury’s said there will be a “phased withdrawal” from the banking business.
Although no current timeline has been issued for how long the changes will take.
Several options are being explored according to Sainsbury’s, these could result in products like credit cards, loans and savings accounts being outsourced to other providers.
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The bank already outsources its insurance products, and its Argos credit cards and loans to about 2.1million customers.
The supermarket giant stressed that nothing will immediately change for current or future customers of Sainsbury’s Bank, and it is “business as usual for now”.
This also includes Argos‘ financial services too.
So, it’s important to note nothing will happen overnight and customers will be alerted to any outsourcing or switches if they do occur.
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In the short term, it’s likely customers won’t notice much change.
The move has led to Sainsbury’s Bank chief executive Jim Brown announcing he will retire from his role.
Simon Roberts, the chief executive of Sainsbury’s, said: “We have been clear since we launched our Food First strategy in 2020 that we would concentrate our efforts on our core retail businesses and today’s announcement reflects that strategic focus.
“It’s business as usual for now at Sainsbury’s Bank and there will be no immediate changes to products and services as a result of today’s announcement.”
Mr Roberts added that it will communicate directly to customers “well in advance” of any changes to their products and services.
Sainsbury’s Bank, founded in 1997, started as a joint venture between J Sainsbury PLC and Bank of Scotland, a subsidiary of Lloyds Banking Group.
The supermarket took full ownership of the business back in 2014.
Banking customers can access services online, over the phone, or through branches located inside Sainsbury’s supermarkets.
Last summer Sainsbury’s Bank offloaded its £479million mortgage book to Co-op Bank.
Sainsbury’s isn’t the only supermarket eye up axing its banking services in the last year.
In February 2023, Tesco was said to be reviewing the future of its banking arm – Tesco Bank.
Earlier this month it was then reported HSBC had submitted an indicative offer for the business, which has about five million customers and employs more than 3,500 people.
Elsewhere, struggling Metro Bank announced it was to axe 800 jobs and review its opening hours in a new cost-cutting drive.
The high street bank is considering cutting its seven-day branch opening hours as it attempts to claw back costs.
It comes after a difficult time for banks in the UK.
The latest announcements mean over 190 branches so far will shut this year as banks look to move away from the high street.
Data from the UK’s largest cash machine network, LINK, keeps track of any planned branch closures across the UK.
Several major lenders have been affected, such as Barclays, Lloyds and the Bank of Scotland.
Customers are increasingly turning to online banking to manage their finances while banks and building societies look for ways to cut costs.
Meanwhile, here is the full list of bank branches closing in 2024 including Lloyds and Barclays.
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Plus, a high street bank has confirmed that it will close more branches in another high street blow.
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