Supermarket giant Sainsbury expected to report increased profits
Sunday 05 May 2013
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.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...
£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...
£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...
£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...