James Moore: Sainsbury's has its work cut out if it's going to make banking taste better

Outlook Bank well for less. Is that going to be the slogan for the new Sainsbury's Bank? New Sainsbury's Bank, you say. But hasn't the show been on the road for 16 years? In fact, wasn't Sainsbury's the first supermarket to dip its toes in these waters?

Indeed it was. But since then dipping its toes in the water is all Sainsbury's has been doing. The price tells you that: the supermarket bought out Lloyds Banking Group from their joint venture for the princely sum of £248m, which amounts to tuppence ha'penny in banking terms.

Sainsbury's Bank was originally created as a joint venture with Bank of Scotland. It made a lot of sense for the two to partner up: BoS didn't have much business outside Scotland while Sainsbury's did, but didn't know much about banking.

The marriage made less sense after BoS merged with Halifax to form HBOS (now part of Lloyds), a business which had lots of customers south of the border, but which made no sense at all towards the end of its life.

Sainsbury's didn't make much sense either for a while in the noughties. Even when it started to turn around management had a fair few challenges to deal with, private-equity takeover bids for starters.

So perhaps it's no wonder that the financial services arm rather drifted. That could change, as a resurgent retailer eyes new horizons now that the core business is humming.

But can Sainsbury's make banking taste better? It remains to be seen.

Sainsbury's is good at customer service, something most banks struggle with. But it will need to show customer TLC is not inimical to banking if the business grows and hires lots of bankers to run it. And it will have to hire bankers: regulators want to have people with experience overseeing banks. Bankers aren't much good at banking, as we've learned to our cost, but retailers can sometimes be even worse. The man in at the helm when HBOS hit the rocks was a retailer: Andy Hornby. Like all retailers, he was good at selling things. But selling lots of loans can get you into lots of trouble if you haven't sold lots of people on depositing with you when the money markets dry up.

Justin King, pictured, has made Sainsbury's a force again, of that there is no doubt. But this is a new frontier he's opening up. Sainsbury's has work to do to get its bank even to the level of Tesco's equivalent, which offers a wider range of products and is now contemplating current accounts.

There is considerable goodwill behind him doing that: those regulators, and their political masters, are desperate for new entrants to reduce the dominance of the big four banks. While Sainsbury's bank is 16 years old, it almost counts as a new entrant if it plans to make a real go of it.

But while that goodwill is nice, for Sainsbury's Bank to succeed it needs the focus and commitment of its parent. Sainsbury's Bank needs the TLC if it's to generate fan mail.

Start your day with The Independent, sign up for daily news emails
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Alexis Sanchez missed a penalty before scoring the opening goal with a header at the back post
footballArsenal vs QPR match report
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all