The third largest supermarket retailer in Britain, J Sainsbury is in deep discussion woth Lloyds Banking Group as to the acquisition of full ownership of the Sainsbury Bank joint venture.
The statement came after much media speculation over the week's end that Sainsbury was nearing to buy out Lloyd's 50% share in the bank. This was a first in British banking history, when in February 1997, the supermarket opened its bank through the joint venture with Lloyds.
Sainsbury Bank offers a wide array of financial products and services such as insurance underwriting and coverage, credit card services as well as retail banking services such as savings and loans.
Should the Sainsbury buyout push through, this would be clearly a mirror image of Tesco's acquisition of RBS's stake in Tesco Personal Finance nearly five years ago.
This is also another means for banks to comply with the stringent regulations imposed by Basel II, which is the divestment of non-core assets and interests, as banks and retail grocery stores are two different businesses altogether.
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