20 June
2024
Purchase of Sainsbury's Bank assets &
liabilities
Natwest Group plc ("NatWest Group") today
announces that it has entered into an agreement with Sainsbury's
Bank plc ("Sainsbury's Bank") to acquire the retail banking assets
and liabilities of Sainsbury's Bank which comprises its outstanding
credit card, unsecured personal loan and saving
accounts.
NatWest Group expects to acquire approximately
£2.5 billion of gross customer assets, comprising £1.4 billion of
unsecured personal loans and £1.1 billion of credit cards balances,
together with approximately £2.6 billion of customer
deposits.
As part of the transaction NatWest Group also
expects to add around one million customer accounts.
Paul Thwaite,
NatWest Group CEO, commented:
"Following
today's announcement, we look forward to welcoming new customers to
NatWest Group, where they will benefit from our expertise and
award-winning digital banking offering. This transaction is a great
opportunity to accelerate the growth of our Retail Banking business
at attractive returns, in line with our strategic priorities. As
well as a complementary customer base, the transaction is expected
to add scale to our credit card and unsecured personal lending
business within existing risk appetite. NatWest Group has a strong track record
of successful integration, and we are focussed on ensuring a smooth
transition for customers."
Simon Roberts,
Sainsbury's CEO, commented:
"I am pleased
to be announcing this news today. NatWest's values and customer
focus are a close fit with ours and as one of the UK's leading
banks, NatWest's scale and financial services expertise will ensure
our existing financial services customers continue to be well
looked after. There will be no immediate change for our bank
customers as a result of this announcement. Today's news means we
will focus all our time and resources going forward on growing our
core retail business, delivering great quality and value, week in
week out."
This transaction is expected to have a 20 basis
point impact on NatWest Group's CET1 ratio upon completion and be
EPS and RoTE accretive upon completion.
Additional
information
·
NatWest Group is entering into this transaction through its
subsidiary, National Westminster Bank plc.
· The
transaction will be effected through a banking business transfer
under Part VII of the Financial Services and Markets Act
2000.
·
Completion of the transaction is conditional on court
sanction and regulatory approval or non-objection. Before
completion, customary completion matters are due to be finalised,
including a transitional services agreement. Subject to this,
completion is expected to occur during the first half of
2025.
· The
operational infrastructure and commission income businesses of
Sainsbury's Bank including ATMs, insurance and travel money are not
included in this transaction. Argos Financial Services is also not
included in this transaction perimeter.
·
Forecast balance sheet and account values disclosed are at
completion which is assumed to be 31 March 2025. Under the
terms of the transaction, the gross customer assets and liabilities
and associated cash at completion will transfer to NatWest Group
and an agreed £125M consideration will be payable from Sainsbury's
Bank to NatWest Group. The forecast utilises values which are based
on management information provided by Sainsbury's Bank. Actual
gross customer assets, balances and customer accounts to be
acquired may vary at completion. The final consideration will
reflect the value of assets and liabilities transferred at
completion of the transaction and will be subject to certain
customary adjustments.
· There
is no immediate change for our new customers and they will be
contacted in due course.
Further
information
Investor Relations: + 44 (0)207 672
1758
Media Relations: + 44 (0)131 523 4205
Legal Entity
Identifiers
NatWest Group plc:
2138005O9XJIJN4JPN90
National Westminster Bank plc:
213800IBT39XQ9C4CP71
Caution about
forward-looking statements
This document contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995, such as statements that
include, without limitation, the words 'expect', 'estimate',
'project', 'anticipate', 'commit', 'believe', 'should', 'intend',
'will', 'plan', 'could', 'probability', 'risk', EPS (earnings per
share) and ROTE (return on tangible equity), 'target', 'goal',
'objective', 'may', 'endeavour', 'outlook', 'optimistic',
'prospects' and similar expressions or variations on these
expressions. These statements concern or may affect future matters,
such as NatWest Group's future economic results, business plans and
strategies. In particular, this document includes
forward-looking statements relating to (a) the expected or
estimated impact of the acquisition on NatWest Group, including the
number of customer accounts, gross customer assets, loan, credit
card and deposit balances to be acquired by NatWest Group at
expected completion of the acquisition, the expected impact on
Natwest Group's CET 1 ratio and expectations that the
acquisition will be EPS and ROTE accretive for NatWest Group
or (b) NatWest Group in respect of, but not limited to its economic
and political risks, its financial position, profitability and
financial performance (including financial, capital, cost savings
and operational targets), the implementation of its strategy, its
climate and sustainability-related targets, increasing competition
from incumbents, challengers and new entrants and disruptive
technologies, its access to adequate sources of liquidity and
funding, its regulatory capital position and related requirements,
its exposure to third party risks, its ongoing compliance with the
UK ring-fencing regime and ensuring operational continuity in
resolution, its impairment losses and credit exposures under
certain specified scenarios, substantial regulation and oversight,
ongoing legal, regulatory and governmental actions and
investigations, and NatWest Group's exposure to operational risk,
conduct risk, cyber, data and IT risk, financial crime risk, key
person risk and credit rating risk. Forward-looking statements are
subject to a number of risks and uncertainties that might cause
actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statements. Factors that could cause or contribute
to differences in current expectations include, but are not limited
to, future growth initiatives (including acquisitions, joint
ventures and strategic partnerships), the outcome of legal,
regulatory and governmental actions, processes and investigations,
the level and extent of future impairments and write-downs,
legislative, political, fiscal and regulatory developments,
accounting standards, competitive conditions, technological
developments, interest and exchange rate fluctuations, general
economic and political conditions and the impact of climate-related
risks and the transitioning to a net zero economy. These and other
factors, risks and uncertainties that may impact any
forward-looking statement are discussed in NatWest Group's 2023
Annual Report on Form 20-F, NatWest Group's Interim Management
Statement for Q1 2024 on Form 6-K, and its other public filings.
The forward-looking statements contained in this document speak
only as of the date of this document and NatWest Group does not
assume or undertake any obligation or responsibility to update any
of the forward-looking statements contained in this document,
whether as a result of new information, future events or otherwise,
except to the extent legally required.