Sainsbury’s Bank is poised to create about 70 jobs by the end of this year as it prepares for life as a wholly-owned subsidiary of the supermarket group.
The plans were unveiled as the bank, which was created as a joint venture with Bank of Scotland, signed the lease on a new head office in Edinburgh, offering more than double the space of its existing home in the city.
Chief executive Peter Griffiths, the former head of Principality Building Society, said: “We have been delivering strong, sustainable growth over the past few years, and as we enter a new phase in our history, it is appropriate that we have new offices that can support our growth plans.”
The bank currently employs about 350 staff in Edinburgh, having expanded its headcount by 20 per cent last year, and Griffiths said he expects a similar rate of growth for 2013.
He added: “We have a loyal and talented workforce and remain committed to keeping our office in Edinburgh, where the employment market for financial services is very strong.”
Sainsbury’s Bank was formed in 1997, with the UK’s third-largest supermarket taking a 55 per cent stake and Bank of Scotland holding the rest. It became a 50-50 joint venture six years ago when Bank of Scotland parent HBOS – now part of Lloyds Banking Group – paid £21 million for an additional 5 per cent.
In May, the grocer announced that it would be taking full control of the unit by paying Lloyds £248m for its stake, and the acquisition is expected to be completed in January.
The deal will put the banking operation on the same footing as rival Tesco, which acquired Royal Bank of Scotland’s interest in Tesco Personal Finance – now called Tesco Bank – five years ago.
Sainsbury’s Bank, chaired by former Barclays executive Roger Davis, has been beefing up its management team in preparation for life as a standalone business, and last week named ING veteran Mark Mullington as its new chief risk officer.
Other recent arrivals include chief operating officer Steve Burke, while Lady Susan Rice, the boss of Lloyds Banking Group Scotland, joined the supermarket’s board in June as a non-executive director.
The lender, which has 1.5 million customer accounts, generated a pre-tax profit of £59m last year. It is currently based at the South Gyle business park – as is Tesco Bank – but will next year make the short move to its new head office at Edinburgh Park.
It is taking on the lease for an 80,000sq ft office building that was previously occupied by Kames Capital – formerly called Aegon Asset Management – in what commercial property firm Jones Lang LaSalle (JLL) said was the largest letting in the Scottish capital for nine years. JLL acted for property owner Aviva Investors in letting the four-storey building, which became vacant when staff from Kames moved into Aegon’s head office at Lochside Crescent last year. Cushman & Wakefield acted for Sainsbury’s.
Julian Cobourne, investment manager at Aviva Investors, said: “We have held on to the building as we always believed in the product, and to have secured this letting justifies our strategy.”