Two UK banks receive ‘preliminary’ takeover approaches
Written by Rother Radio News on 17/11/2020
UK lenders Sainsbury’s Bank and the Co-operative Bank have revealed separate takeover approaches.
Sainsbury’s said it had received a number of “very preliminary” enquiries – weeks after Sky News revealed the retail giant was exploring a sale of its banking arm despite public commitments to a five-year plan for the bank started last year.
“We are on track to deliver that plan despite the impact of COVID-19 and expect to deliver a profit in the second half of this financial year,” Sainsbury’s told investors in a statement.
“We have received some very preliminary expressions of interest in the bank, but this does not mean anything will come of these discussions.”
Offloading the business, which has more than two million customers across a range of products including mortgages, home insurance and credit cards, is potentially attractive as returns are squeezed by ultra-low interest rates.
In the Co-op’s case, it revealed a non-binding offer from a “financial sponsor with knowledge and experience of investing in European financial services businesses”.
Its statement said: “The bank continues to be in discussions with this financial sponsor, although such discussions remain at a preliminary stage.”
The bank nearly collapsed in 2013 following the discovery of a £1.5bn black hole in its finances, and later came under the control of a group of hedge funds.
Its fightback has since struggled to make headway.
Co-op Bank announced in August that 11% of its workforce was to go, partly through the permanent closure of a quarter of its 68-strong branch estate.
Chief executive Andrew Bester said then: “Unfortunately, we’re not immune to the impact of recent events, with the historically low base rate affecting the income of all banks and a period of prolonged economic uncertainty ahead, which means it’s important we reduce costs and have the right-sized operating model in place for the future.”
© Sky News 2020