Natwest Group has agreed to acquire Sainsbury’s Bank’s retail banking assets and liabilities, including personal loan, credit card and retail deposit portfolios.

Under the terms of the agreement, an agreed consideration of £125m will be payable by Sainsbury’s Bank to NatWest Group.

The acquisition comprises nearly £2.5bn of gross customer assets, encompassing £1.4bn of unsecured personal loans and £1.1bn of credit card balances along with around £2.6bn of customer deposits.

In addition, NatWest Group aims to add approximately one million customer accounts as part of the transaction.

NatWest Group CEO Paul Thwaite said: “Following today’s announcement, we look forward to welcoming new customers to NatWest Group, where they will benefit from our expertise and award-winning digital banking offering.

“This Transaction is a great opportunity to accelerate the growth of our Retail banking business at attractive returns, in line with our strategic priorities.

“As well as a complementary customer base, the Transaction is expected to add scale to our credit card and unsecured personal lending business within existing risk appetite.”

The transaction will not involve Sainsbury’s Bank’s commission income businesses, such as ATMs, insurance, and travel money. These businesses are capital-light, profitable and aligned to Sainsbury’s Bank’s core retail offer, said the British bank.

Argos Financial Services (AFS) is also not included in the deal. Sainsbury’s Bank plans to provide the plans for this business at a future date.

Sainsbury’s Bank CEO Simon Roberts said: “NatWest’s values and customer focus are a close fit with ours and as one of the UK’s leading banks, NatWest’s scale and financial services expertise will ensure our existing financial services customers continue to be well looked after.

“There will be no immediate change for our bank customers as a result of this announcement. Today’s news means we will focus all our time and resources going forward on growing our core retail business, delivering great quality and value, week in week out.”

The proposed deal, to be executed through NatWest Group’s subsidiary National Westminster Bank, will be effected through a banking business transfer under Part VII of the Financial Services and Markets Act 2000.

Subject to court sanction, customary conditions and regulatory approval or non-objection, the deal is anticipated to be completed during the first half of 2025.

Earlier this month, NatWest Group agreed to make an off-market purchase of its shares worth £1.24bn from the UK government’s economic and finance ministry HM Treasury.