Sainsbury's Talks on Takeover of Bank 'Advanced'

J Sainsbury is in "advanced negotiations" with Lloyds Banking Group to take full control of its banking joint venture.

Sainsbury's Bank was created in 1997 by the supermarket group and Bank of Scotland but Sainsbury's now wants to acquire full ownership of the business.

A deal to buy out Lloyds - which took control of Bank of Scotland in 2009 - from the 50-50 venture is likely to cost Sainsbury's hundreds of millions of pounds, but it will allow the retailer to ramp up its banking services and take advantage of the brand.

Sainsbury's rival, Tesco, agreed a similar deal with Royal Bank of Scotland in 2008 to buy control of Tesco Bank for £950m.

A Sainsbury's spokesman said: "J Sainsbury's notes the press speculation concerning Sainsbury's Bank and confirms it is in advanced negotiations with Lloyds Banking Group to take full ownership of Sainsbury's Bank. A further announcement will be made in due course."

An announcement could come with Sainsbury's annual results on Wednesday, when the company is expected to unveil a 1.8pc rise in like-for-like sales, with underlying pre-tax profits up 5pc to £748m. This growth in sales and profits would be ahead of Sainsbury's main rivals, including Tesco, Asda, and Wm Morrison. It will put Sainsbury's on course to overtake Asda within a year and reclaim the position of Britain's second-biggest supermarket chain for the first time in a decade.

According to the latest supermarket market share data from Kantar, Sainsbury's holds 16.9pc of the market, while Asda holds 17.5pc and Tesco has 29.9pc.

Source: The Telegraph