Sainsbury's bank set to grow as grocery market faces tough times

Graham Hiscott
15 April 2015
Mirror UK
The supermarket’s financial arm already has 1.6m customers and has made around £60m in past 12 months
PAA general view of a Sainsbury’s Local store with cash point in WimbledonMaking bread: Sainsbury’s bank has 1.6m customers
Sainsbury’s has signalled big plans to grow its bank.
The supermarket’s financial ­services arm already has 1.6million customers. But the company believes it has masses of potential, especially with the grocery market facing tough times for the foreseeable future.
Finance boss John Rogers said: “I think it is one of the most exciting growth opportunities for the ­business.”
Sainsbury’s took full control of the bank at the end of January last year after buying the remaining 50% from Lloyds Banking Group .
At the moment its product range is limited to mainly credit cards – where customer numbers jumped 55% last year – personal loans and insurance.
It also offers travel money and has opened a series of in-store currency bureaux.
Sainsbury’s will mainly focus on growing these areas although it hasn’t ruled out, over time, adding mortgages and current accounts – which its rival Tesco has already launched.
The bank is already a money-spinner for Sainsbury’s having made around £60million in the past year, or nearly 10% of the group’s overall profit.
A Sainsbury’s supermarket in Vauxhall, south London
Sainsbury’s also reckons it can cash in on a backlash against big banks and use it to boost customer loyalty.
Rogers said: “Around 4% to 5% of our customers have a Sainsbury’s credit card. There is no reason why we can’t double that number over the next three to five years.”
The plans emerged as Sainsbury’s gave an update on how it wants to expand the business in the face the biggest shake-up of the market for decades.
The firm has already said one in four of its stores has too much space, covering around 6% of its total selling area.
Under its plans half of that will be used to expand things such as clothing and homeware.
However, some analysts warn Sainsbury’s has the most to lose from a resurgent Tesco if Britain’s biggest supermarket chain returns to its all-conquering ways.