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Sainsbury's Bank Mortgages On The Cards

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Griffiths said he does not see Sainsbury’s as a so-called “challenger” bank to the big four, believing that they occupy different areas of the market and he accepts that the vast majority of those who have bought a product from Sainsbury’s will have their main account with another bank. There is no plan to follow Tesco by launching a current account.

However, it is possible that Sainsbury’s will move into mortgages. “Mortgages are natural bedfellows for us at some stage,” he said, noting that the bank has £3.5 billion on deposit.

“We have to do something with the savings we have,” he said, “and mortgages become an attractive option.”

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Glad I have been slowly reducing my exposure to 'Sainsbury's' over the past 6 months. They have done very well over the past 18 months with a few ups and downs. However they have made me nervous of late at a basic level; their stores are still scruffy whilst the likes of Lidl and Aldi are looking smarter and smarter.

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I thought I was experiencing deja vu there for a minute. Sainsbury's used to do mortgages. They stopped in 2004 as they failed to attract customers.They hoped to return to the market when the housing market was right with products that offered more than low rates...

They must think the housing market is looking good then?

http://www.telegraph.co.uk/finance/personalfinance/consumertips/banking/2889584/Sainsburys-Bank-drops-mortgages.html

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I thought I was experiencing deja vu there for a minute. Sainsbury's used to do mortgages. They stopped in 2004 as they failed to attract customers.They hoped to return to the market when the housing market was right with products that offered more than low rates...

They must think the housing market is looking good then?

http://www.telegraph.co.uk/finance/personalfinance/consumertips/banking/2889584/Sainsburys-Bank-drops-mortgages.html

Not necessarily.

They may be looking to move from cash into hard assets.

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Aren't Sainsburys bank just a marketing exercise fronting some kind of arrangement with HBOS?

A lot of their products, for instance home insurance, is actually through the Halifax.

'Pick up a mortgage at the till' at the same time as picking up that strategically placed chocolate bar :rolleyes:

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Not necessarily.

They may be looking to move from cash into hard assets.

In general the asset side of Sainsburys' balance sheet would change its composition, without affecting its depositors' balances (Sainsburys' liabilities.)

As mortgages were issued, some Sainsburys' BoE reserves paying 0.5% would be replaced by an expanding mortgage loan book (with hard assets as collateral) paying about 4%, assuming that the new broad money created by the mortgages is deposited at other banks.

If by chance any of the new mortgage-created broad money were deposited with Sainsburys then the balance sheet would expand accordingly without changing the BoE reserves.

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They're preparing for when people need mortgages for a loaf of bread.

Deduct your shopping bill from your equity to increase ours plus interest....would be still paying for something you ate 25 years ago. ;)

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