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Retail

Sainsbury's Concludes Talks On Selling Banking Operation

Sainsbury's has ended talks about selling its banking operation after concluding that approaches it received in November 2020 did not offer good value for shareholders.

'Whilst the Board of Sainsbury's believe that it was in the best interests of shareholders to explore these expressions of interest, it has concluded that these do not offer better value for shareholders than will be realised through retaining Sainsbury's Bank,' the retailer said.

Exploring Bank Sale

Sainsbury's, Britain's second-biggest grocer, started exploring the sale of the bank a year ago as ultra-low interest rates and COVID-19 disruption increased pressures on the business.

British banks including Barclays, Lloyds Banking Group and Natwest were among possible suitors, a source familiar with the matter said in November last year.

Sainsbury's said it was making progress in simplifying the business, which it launched in 1997.

Profit Forecasts For Banking Division

It added it was comfortable with consensus profit forecasts for the division, which stand at £26 million (€30.8 million) for the current financial year.

'We continue to make progress strengthening and simplifying our Financial Services business in line with our strategy and we remain comfortable with consensus profit forecasts for the division,' the retailer said.

In August, The Sunday Times reported that private equity firms are eyeing a potential bid for the retailer, following the recent battle to take over rival Morrisons. Apollo is said to be weighing up the possibility of making a bid for the supermarket group, according to the paper.

News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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