Sainsbury’s Bank has announced the sale of its mortgage portfolio to The Co-operative Bank for approximately $588.1 million in cash. This decision was made following the bank’s September 2019 announcement to cease all new mortgage sales and review its existing mortgage book.
Boosting Funding for the Bank
The sale of the mortgage portfolio, valued at $479 million, will provide Sainsbury’s Bank with additional funding to support its strategic objectives. With around 3,500 customers involved in the deal, the transfer process is expected to be completed within the next year.
A Focus on Streamlining Operations
Sainsbury’s Bank Chief Executive, Jim Brown, stated that the sale of the mortgage book is a significant step in simplifying the business. It allows the bank to reshape its portfolio and concentrate on delivering capital-efficient, mobile-led financial services to its loyal customers from Sainsbury’s and Argos.
Demonstrating Progress in a Competitive Market
Co-operative Chief Executive, Nick Slape, expressed his satisfaction with the acquisition, highlighting that this is their first portfolio acquisition in over a decade. He emphasized that this transaction signifies the organization’s progress in recent years and demonstrates their strength in a fiercely competitive U.K. mortgage market.
The sale of Sainsbury’s Bank’s mortgage portfolio to The Co-operative Bank marks an important strategic move for both institutions. It allows Sainsbury’s Bank to focus on providing efficient financial services while boosting its funding, while The Co-operative Bank strengthens its position in the U.K. mortgage market.