UK retail giant Sainsbury's is to wind down its banking division, having already offloaded is mortgage book to Co-operative Bank in the summer.
The move will see the retailer undertake a phased core withdrawal from the market, instead offering financial services products to its customers through affiliations with third parties. This is similar to its strategy in the insurance business line.
"Financial services products that we continue to offer in the future will be provided by dedicated financial services providers through a distributed model," says the grocer in a statement. "We already do this successfully with our insurance products. Over time this will result in a phased withdrawal from our core Banking business. There will be no immediate changes to the products or services that we provide to our customers."
The banking business, which provides loans, credit cards and savings products to 1.9 million customers, has also appointed a new CEO following the retirement of Jim Brown. His position will be taken over by Robert Mulhall, former CEO of Allied Irish Bank.
Simon Roberts, chief executive of Sainsbury's, comments: “It’s business as usual for now at Sainsbury's Bank and there will be no immediate changes to products and services as a result of today's announcement. We will of course communicate directly to customers well in advance of any changes to their products and services."