Co-operative Bank ‘among front runners to buy £650m Sainsbury’s Bank loans book’
The Manchester-based Co-operative Bank is among bidders to buy a £650m loan portfolio being offloaded by Sainsbury’s Bank.
The approach signals the bank’s strong recovery, after twice almost going bust in the past decade.
In November last year chief executive, Nick Slape, revealed: “Our turnaround progress is ahead of schedule, which reflects the strong financial performance and sustained focus on risk management over many years.”
He made the remarks after announcing the group’s pre-tax profits for the first nine months of the year were just over £100m and it was “now fully capital compliant including all buffers for the first time since 2013.”
Sky News is reporting that the Co-op Bank is among the front runners bidding to take the loans book off Sainsbury’s Bank, which has engaged Deloitte to handle the sale, which would see the supermarket giant exit the UK mortgage market, having ceased new lending in 2019.
Rival Tesco is also believed to be considering a disposal of its own banking operation.
As part of its resurgence, the Co-op Bank is understood to have hired bankers from PJT Partners to help it spearhead the consolidation of the mid-tier UK retail banking market, shortly after it failed in a £1bn bid to buy TSB from the Spanish bank Sabadell.
Last November the bank, which is due to announce its 2022 annual results next Wednesday (March 1), raised its forecasts for the financial year after a strong third quarter.
And it said, despite rising interest rates and other economic pressures affecting customers, it was “currently seeing no signs of stress across our portfolio”.
It added: “We have a low risk balance sheet with limited exposure to unsecured and corporate lending.”
A Co-operative Bank spokesperson told TheBusinessDesk.com: “We aren’t making any comment on media speculation at this time.”