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
Thursday 09 May 2013
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."
International Women's Day 2014: The shocking statistics that show why it is still so important
Feminist quotes to inspire you on the International Women's Day
Oscar Pistorius trial first week: Never mind a media scrum – murder case becomes bizarre safari following the tracks of a wounded lion
International Women's Day 2014: Mothers and daughters around the world describe hopes and dreams in touching photographs
International Women’s Day: 'When a man gives his opinion, he's a man. When a woman gives her opinion, she's a bitch' - feminist quotes from female icons to inspire you
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 To those who can’t see the point of International Women’s Day: you are the very reason it exists
- 2 International Women's Day 2014: The shocking statistics that show why it is still so important
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Too upsetting? Academy members voted for Oscar-winning 12 Years A Slave 'without watching it'
- 5 Liam Neeson turned down James Bond role because Natasha Richardson said she wouldn't marry him if he took it
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...