Supermarket giant Sainsbury expected to report increased profits

 

Supermarket giant Sainsbury is expected to crown another rise in profits this week with a deal to take full control of its banking business.

The chain is believed to be planning on buying out Lloyds Banking Group's 50% share in Sainsbury's Bank, a joint venture set up in 1997.

According to Sky News, the deal is expected to cost it several hundred million pounds but will provide the supermarket with greater freedom to develop and market new banking products and services.

It also puts the Edinburgh-based banking operation on the same footing as Tesco after its big rival acquired Royal Bank of Scotland's stake in Tesco Personal Finance five years ago.

The Sainsbury's deal is likely to be announced alongside results on Wednesday showing pre-tax profits of £750 million for the year to the end of March, the ninth consecutive rise as chief executive Justin King maintains the chain's improvement since his arrival in March 2004.

Sainsbury's profit from its share of the banking joint venture amounted to £16 million in the last financial year but this is expected to rise to around £25 million in this week's results.

The division now has 1.4 million active customers and offers savings, loans and credit cards.

It has benefited from strong growth in personal loans and pet, car and home insurance, as well as tight control over costs and bad debts.

Customers who have a Sainsbury's Bank product are more likely to increase their spend in-store due to targeted offers and promotions using Nectar loyalty data.

Recent figures from market researcher Kantar Worldpanel show Sainsbury's was the only one of the big four supermarkets to grow market share during the 12 weeks to mid-April.

The sale of the stake in Sainsbury's Bank should benefit Lloyds, which is 41%-owned by taxpayers, at a time when regulators are forcing British banks to bolster their capital reserves.

PA

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Exhibition Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An expanding B2B exhibition and...

Recruitment Genius: QA Technician

£16000 - £18000 per annum: Recruitment Genius: This leading manufacturer of re...

Recruitment Genius: Office Administrator

£20000 per annum: Recruitment Genius: Due to expansion, an experienced and hig...

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat