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| Sainsbury's to take full control of banking arm | Sainsbury's to take full control of banking arm |
| (5 months later) | |
| J Sainsbury plc has confirmed plans to buy Lloyds Banking Group's 50% stake in Sainsbury's Bank and take full control of the operation. | J Sainsbury plc has confirmed plans to buy Lloyds Banking Group's 50% stake in Sainsbury's Bank and take full control of the operation. |
| The retailer said it would pay £248m for the stake, and that it expected to complete the transfer at the end of January 2014. | The retailer said it would pay £248m for the stake, and that it expected to complete the transfer at the end of January 2014. |
| The retailer said it had a plan in place to transfer the back-office operations from Lloyds over the next 42 months, and that the new system would "allow a greater degree of flexibility, enabling new product launches and facilitating a much improved digital offer to customers". | The retailer said it had a plan in place to transfer the back-office operations from Lloyds over the next 42 months, and that the new system would "allow a greater degree of flexibility, enabling new product launches and facilitating a much improved digital offer to customers". |
| Sainsbury's chief executive, Justin King, said: "We have 23m transactions each week by customers who know and trust the Sainsbury's [Bank] brand. | Sainsbury's chief executive, Justin King, said: "We have 23m transactions each week by customers who know and trust the Sainsbury's [Bank] brand. |
| "We see a great opportunity to increase the number of Bank customers by offering accessible, high quality financial services products which reward customers who bank and shop with us." | "We see a great opportunity to increase the number of Bank customers by offering accessible, high quality financial services products which reward customers who bank and shop with us." |
| What is Sainsbury's Bank? | What is Sainsbury's Bank? |
| The bank was founded in 1997 as a joint venture between Sainsbury's and Bank of Scotland, and was the UK's first supermarket bank. It offers insurance, credit cards, loans, savings and travel money, and currently has 1.5m active accounts. It also runs bureaux de change in some stores and a network of ATMs. Products are advertised in store, but there are no branches and customers transact on the phone and online. | The bank was founded in 1997 as a joint venture between Sainsbury's and Bank of Scotland, and was the UK's first supermarket bank. It offers insurance, credit cards, loans, savings and travel money, and currently has 1.5m active accounts. It also runs bureaux de change in some stores and a network of ATMs. Products are advertised in store, but there are no branches and customers transact on the phone and online. |
| What does the purchase mean for customers? | What does the purchase mean for customers? |
| Sainsbury's says there will be no immediate changes to customers' accounts, but it will be writing to insurance and banking customers to notify them of the purchase. It says its Nectar Card reward scheme will continue to run as it currently does. The bank already has its own banking licence so the change makes no difference to customers' protection under the Financial Services Compensation Scheme. | Sainsbury's says there will be no immediate changes to customers' accounts, but it will be writing to insurance and banking customers to notify them of the purchase. It says its Nectar Card reward scheme will continue to run as it currently does. The bank already has its own banking licence so the change makes no difference to customers' protection under the Financial Services Compensation Scheme. |
| Will it be able to offer the same deals? | Will it be able to offer the same deals? |
| Yes. The products offered by Sainsbury's Bank are not rebadged Lloyds' products so the buyout will not stop Sainsbury's offering the same deals it does now. Its savings and credit deals are the bank's own, while insurance is underwritten by a third party. This arrangement will continue. | Yes. The products offered by Sainsbury's Bank are not rebadged Lloyds' products so the buyout will not stop Sainsbury's offering the same deals it does now. Its savings and credit deals are the bank's own, while insurance is underwritten by a third party. This arrangement will continue. |
| Is it competitive? | Is it competitive? |
| Andrew Hagger of website MoneyComms says the bank has been "a strong player" in simple personal finance products. It currently features in joint second place in the best-buy tables for personal loans of £7,500 and offers competitive credit cards. | Andrew Hagger of website MoneyComms says the bank has been "a strong player" in simple personal finance products. It currently features in joint second place in the best-buy tables for personal loans of £7,500 and offers competitive credit cards. |
| "It recently launched two new reward cards with the lowest interest rate in the market at 7.8% APR representative," Hagger says. "Both Sainsbury's and Tesco have been competitive in the fixed-rate savings market, frequently appearing in the top 10 products in the past couple of years, although along with much of the market the appetite for retail savings appears to have waned recently." | "It recently launched two new reward cards with the lowest interest rate in the market at 7.8% APR representative," Hagger says. "Both Sainsbury's and Tesco have been competitive in the fixed-rate savings market, frequently appearing in the top 10 products in the past couple of years, although along with much of the market the appetite for retail savings appears to have waned recently." |
| Customers can also earn Nectar points by signing up for and, in some cases, using the products. | Customers can also earn Nectar points by signing up for and, in some cases, using the products. |
| Will Sainsbury's launch a current account? | Will Sainsbury's launch a current account? |
| It says it currently has no plans to do so, or to launch any other products in the near future, but will prioritise "innovative, tailored insurance products and services". It is likely to watch its rival retailer Tesco, which has said it plans to enter the current account market at some point after September when new rules on switching accounts come into affect. If Tesco makes a success of its account, Sainsbury's might be tempted to follow. | It says it currently has no plans to do so, or to launch any other products in the near future, but will prioritise "innovative, tailored insurance products and services". It is likely to watch its rival retailer Tesco, which has said it plans to enter the current account market at some point after September when new rules on switching accounts come into affect. If Tesco makes a success of its account, Sainsbury's might be tempted to follow. |
| Hagger points out that Tesco also offers mortgages: "Whether this buy-out from Lloyds means we are more likely to see Sainsbury's follow its main rival into the mortgage market is probably too early to say, but it wouldn't surprise me if it was part of the medium-term plan." | Hagger points out that Tesco also offers mortgages: "Whether this buy-out from Lloyds means we are more likely to see Sainsbury's follow its main rival into the mortgage market is probably too early to say, but it wouldn't surprise me if it was part of the medium-term plan." |
| Should I worried about the transfer on to the new system? | Should I worried about the transfer on to the new system? |
| Sainsbury's Bank says it "is confident there will be no adverse impact" on services when accounts are transferred. It says it has carried out extensive planning and its transition plan is designed to minimise risk and customer impact. Its new banking is being run by a firm called FIS, which has experience of working with 40 of the world's top 50 banks. | Sainsbury's Bank says it "is confident there will be no adverse impact" on services when accounts are transferred. It says it has carried out extensive planning and its transition plan is designed to minimise risk and customer impact. Its new banking is being run by a firm called FIS, which has experience of working with 40 of the world's top 50 banks. |
| Who owns the other big supermarkets' banks? | Who owns the other big supermarkets' banks? |
| Tesco has wholly owned its bank since 2008 when it bought out co-founder the Royal Bank of Scotland. Its insurance products are run by other firms, including Royal & Sun Alliance, but the other deals are its own. | Tesco has wholly owned its bank since 2008 when it bought out co-founder the Royal Bank of Scotland. Its insurance products are run by other firms, including Royal & Sun Alliance, but the other deals are its own. |
| Asda Money offers products run in association with 18 different partners. The call centres are run by those partners to the retailer's specifications. | Asda Money offers products run in association with 18 different partners. The call centres are run by those partners to the retailer's specifications. |
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