The move comes almost four years after Sainsbury’s said its banking operation would stop all new mortgage sales.
The Co-operative Bank has secured a £464 million deal to buy Sainsbury’s Bank’s mortgage portfolio.
The move comes almost four years after Sainsbury’s said its banking operation would stop all new mortgage sales and it was reviewing options for the existing mortgage business.
Sainsbury’s said the sale is a “big step” in helping the firm to simplify its banking business.
Co-op Bank – which is no longer part of the wider Co-operative Group – said the acquired portfolio comprises of approximately 3,500 customers with balances of around £479 million.
It said that, once the deal is completed, Sainsbury’s Bank customers are set to transfer to the bank over a period of one year to ensure a “smooth process”.
Nick Slape, chief executive of Co-op Bank, said: “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.”
Sainsbury’s reported that the mortgage portfolio had provided around £4 million in profits in the last financial year.
Jim Brown, chief executive of Sainsbury’s Bank, 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.
“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.”