Operating Review

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Sainsbury’s Bank

Sainsbury’s Bank became a 50:50 joint venture operation in February 2007 when we announced the sale of five per cent of the business to our partner HBOS plc for £21 million. The Bank remains an important part of our Group and the new ownership structure reflects the shared commitment Sainsbury’s and HBOS plc has to growing the business.

The Bank has made good progress in stabilising its operations over the year and a tight focus on cost control and tighter risk management actions implemented over the past two years has more than offset what has been a worsening environment for consumer credit. In 2006/07 Sainsbury’s Bank made an underlying operating profit of £2 million. It continues to offer growth opportunities and we are targeting profits of £40 million in the year ending March 2010, half of which will be reported after tax.