Proactive Investors - Natwest Group PLC (LON:NWG) has struck a deal to acquire most of Sainsbury 's Bank from J Sainsbury PLC (LON:SBRY), namely its credit cards, personal loans and saving account businesses, for which the supermarket group will pay the bank a £125 million payment.
Customers are expected to be transferred in the first half of next year.
Sainsury's said it expects the bank to return excess capital of at least £250 million once the transaction is fully completed and it has made a decision on the future model for Argos Financial Services, with its intention to return this capital to shareholders.
NatWest said it expects to acquire roughly £2.5 billion of gross customer assets, adding around one million new customer accounts, with a 20 basis point reduction from its CET1 capital ratio once completed, but a positive impact on earnings per share and return on tangible equity.
Sainsbury's Bank's insurance, ATMs and travel money commission income businesses will remain under the wing of the supermarket group.
"These are capital-light and profitable businesses with a strong connection to Sainsbury's core retail offer," the grocer said in a statement.
The sale of the other assets "means we will focus all our time and resources going forward on growing our core retail business, delivering great quality and value, week in week out", said Sainsbury's CEO Simon Roberts, while the sale was to a bank with "similar values and customer focus".
NatWest CEO Paul Thwaite said the transaction is "a great opportunity to accelerate the growth of our retail banking business at attractive returns, in line with our strategic priorities".
"As well as a complementary customer base, the transaction is expected to add scale to our credit card and unsecured personal lending business within existing risk appetite."