Sainsbury’s Bank has agreed to sell its mortgage portfolio to The Co-operative Bank for a cash consideration of around £464m.

The portfolio, made up of approximately 3,500 customers, had a gross asset value of £479m as of 30 April.

Sainsbury’s Bank said it intends to use the proceeds from the transaction to help optimise its overall cost of funding.

The deal is expected to complete alongside a transfer of beneficial ownership on 15 August, with legal title transfer occurring within 12 months.

Following completion of the deal, Sainsbury’s Bank customers are expected to transfer to The Co-operative Bank over this one-year period to ensure a smooth process, with customers to ultimately benefit from The Co-operative Bank’s ongoing transformation and technology re-platforming programme.

CEO of Sainsbury’s Bank, Jim Brown, said: “We’re pleased to confirm we have agreed the sale of our mortgage book to The Co-operative Bank. Closing the chapter on our mortgage offering is a big step in simplifying our business.

“It’s been really important throughout the process that we find a buyer that will best meet the needs of our customers. We chose The Co-operative Bank as it’s a well-known UK mortgage provider, committed to providing excellent customer service, so we are confident that The Co-operative Bank will serve our customers well.

“The sale of the mortgage book will support our strategy to reshape our portfolio and focus on offering capital and cost efficient, mobile-led financial services to loyal Sainsbury's and Argos customers.”

CEO of The Co-operative Bank, Nick Slape, added: “We are delighted to have agreed this transaction with Sainsbury’s Bank. Once the transfer activity is complete, we look forward to welcoming the new customers who will benefit from our ambitious new technology platform, which will simplify our banking services and will make us more efficient, giving us the flexibility to introduce new products and services.

“This transaction, our first portfolio acquisition in more than a decade, further demonstrates the progress we have made in recent years and our strength in what remains a competitive UK mortgage market.”

Share Story: