Eye-catching recruits and full bank buyout fast-tracks Sainsbury's push for supremacy

The supermarket has beefed up its management team with two high-profile banking appointments, and confirmed it would buy the 50 per cent of Sainsbury's Bank it does not already own

Sainsbury's is gearing up for a major assault on the banking sector with ambitious plans to take on HSBC, Royal Bank of Scotland, Santander and the rest of the financial high street.

The supermarket has beefed up its management team with two high-profile banking appointments, and confirmed it would buy the 50 per cent of Sainsbury's Bank it does not already own from Lloyds Banking Group for £248m. At the moment, Sainsbury's sells loans and insurance to 1.4 million customers, but it is poised to copy Tesco's plans to launch current accounts once new rules come in making it easier for customers to switch banks later this year.

Sainsbury's has hired two top bankers to aid the attack: Lady Susan Rice of Lloyds, who joins as a non-executive on the board, and Roger Davis, former chief executive of Barclays' UK bank, who will become non-executive chairman of the supermarket bank. Peter Griffiths, the bank's chief executive, will remain in charge of the day-to-day operation.

The takeover of the joint venture should fast-track the grocer's push into financial services, and may improve the company's ability to cross-sell financial products such as insurance, credit cards and personal loans to its supermarket customers.

Lloyds will keep the liability for any possible claims for the mis-selling of payment protection insurance incurred before the deal – a relief to shareholders. Sainsbury's Bank reported a profit of £59m last year.

Meanwhile, Sainsbury's chief executive, Justin King, dismissed talk that he was looking for a new job as he unveiled another market-beating set of results in what he claimed was the toughest environment for years.

With gossip again swirling that he will soon move on after nine years at the helm, Mr King insisted he will still be in place in a year's time. He said: "I don't see myself at Sainsbury's when I am 65. But I'm 51. I've got time left."

Sainsbury's reported a 6 per cent rise in annual profit to £756m – ahead of City expectations. Sales are up 4.6 per cent to £25.6m with the dividend 3.7 per cent higher at 16.7p. The company's market share is at 16.8 per cent, the highest for a decade. "The context is that this was probably the toughest year in the last 20," said Mr King, who was paid £3m last year. "We are the only one of the big five to have grown market share."

Mr King says customers remain cautious: "They've been in the same place for the last three years. There was a step change after Christmas 2010. We saw smaller weekly shops and that change has stuck. Wages are growing slower than prices. That's reality."

Phil Dorrell of the retail consultant Retail Remedy said: "Sainsbury's is close to its customers, is continually improving its stores and, in Justin King, has a chief executive who puts a spring in the step of staff and shareholders alike. Above all, Sainsbury's has a single-minded focus on the UK business. It hasn't been dazzled by the need for global recognition."

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