Sainsbury’s, the UK’s third-largest supermarket chain has confirmed that it will acquire the remaining 50% shareholding of Sainsbury’s bank from Lloyds Banking Group.
The £248m ($384m) deal will lead to a 42 month transition plan that aims to implement a more flexible, modern banking platform.
Justin King, chief executive. Sainsbury’s said of the deal: "This is an exciting transaction for Sainsbury’s which has the potential to deliver significant benefits to our shareholders, customers and colleagues. We expect the Bank to become an important source of profit diversification and growth, building on the strengths of our core business."
Sainsbury’s bank has around 1.4m customers and offers a range of insurance, savings and loans products.
The retailer formed Sainsbury’s bank in 1997, with Sainsbury’s holding a 55% stake and Bank of Scotland (now part of Lloyds Banking Group) the remaining 45%, Lloyds acquired a further 5% stake in 2007.
Completion is expected in January 2014.
Sainsbury’s plans to buy out Lloyds Banking Group’s stake mirrors Tesco bank buying out Royal Bank of Scotland’s 50% stake in Tesco bank in 2008.
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