Co-op front runner in race to buy Sainsbury’s Bank’s £650m loan book, according to reports
The Co-operative Bank has tabled an offer for Sainsbury’s Bank’s £650m loan portfolio being, according to reports by Sky News.
The Co-operative bank is among a number of parties understood to have tabled a bid for the supermarket bank’s loan book .
An insider cited by Sky News said the Co-operative “appeared to be the frontrunner” and that Starling Bank had also expressed an interest, but withdrew “some time” ago.
The move will signal Sainsbury’s Bank’s formal exit from the UK mortgage market after it ceased new lending in 2019. Sainsbury’s was reported to be planning a sale of its banking arm in October 2020.
The Co-operative has been eyeing up potential acquisitions for more than a year as it hopes to consolidate the mid-size banking market.
It tabled an unsolicited £1.1bn bid for TSB Bank in 2021, which was unanimously rejected, before appointing PJT partners to help scrutinise potential takeover targets in February last year.
In the first nine months of the year, Co-op’s profit surged 75 per cent on last year as higher interest rates boosted its performance.
The bank will release its full year figures next week, with analysts anticipating that interest rates will have continued to benefit the lender. Major high street lenders NatWest and Barclays’ UK retail division reported strong profits last week, boosted by higher interest rates.
The news follows reports that Tesco was considering selling Tesco Bank having started a review process for its banking arm. The review is at a very early stage, according to insiders cited, and may not lead to a formal sale process.
Tesco Bank was launched in 1997. It has more than five million customers across its banking and insurance business.
The Co-operative Bank declined to comment. Sainsbury’s Bank has been contacted for comment.