5% sale of Sainsbury's Bank

Sainsbury(J) PLC
09 February 2007





9 February 2007





Sale of five per cent of Sainsbury's Bank



Sainsbury's today announces that it has sold five per cent of its shareholding
in Sainsbury's Bank for £21 million to HBOS.  This sale will give rise to a
profit on disposal of around £10 million.   The proceeds will be used for
general business purposes.



As a result of this transaction the Bank will become a 50:50 joint venture
between Sainsbury's and HBOS with equal control and input at shareholder and
Board level.  Both parties believe that the 50:50 joint venture structure is
more appropriate and reflects the shared commitment each partner has to growing
the business for the long-term.



The Board of Sainsbury's Bank will comprise eight directors with three from both
Sainsbury's and HBOS and two executives from the Bank.   Benny Higgins, HBOS
retail chief executive, will be the new chairman for a period of two years,
after which Darren Shapland, Sainsbury's chief financial officer will assume the
role.  The Sainsbury's directors will be Darren Shapland, Gwyn Burr, customer
director and Imelda Walsh, HR director.



Darren Shapland, said, 'We are committed to growing the Bank's business and are
increasing our presence in the financial services sector. The Bank's chief
executive, Rob Walker, is streamlining the operational structure and developing
a broader business plan.  The sale of our five per cent for £21 million
demonstrates the value of the Bank and a 50:50 structure reflects the continued
commitment of both shareholders'.'



Benny Higgins, said, 'Sainsbury's Bank has strong customer loyalty.  The
business has demonstrated it can acquire and retain customers very effectively.
There is significant potential to grow the business.  We aim to do just that.'





Notes

1.         Certain statements made in this announcement are forward looking
statements.  Such statements are based on current expectations and are subject
to a number of risks and uncertainties that could cause actual results to differ
materially from any expected future events or results referred to in these
forward looking statements.

2.       Until 8 February 2007 Sainsbury's Bank performance will be fully
consolidated into the Group results and will be included in Group underlying
profit before tax. A minority interest will be shown for the minority share of
this performance to the date of the transaction.  The profit on disposal will be
excluded from underlying profit before tax.  Following this transaction,
Sainsburys Bank will be treated as a Joint Venture and accounted for under the
Equity Accounting method.  Sainsbury's equity share (i.e. 50%) of the Bank's
post tax profit or loss will be disclosed through the line 'Share of post tax
profit from joint ventures'. This is outside operating profit but within
underlying profit before tax.

3.       After the transaction the assets and liabilities of the Bank will not
be consolidated line by line in the Group Balance Sheet but will be shown as a
single line representing Sainsbury's equity share (i.e. 50%) of the Bank's net
assets at the balance sheet date.  Net assets will increase by profit on
disposal.  The £21 million proceeds will increase cash flow in 2006/07.  The
Bank's net funds will be excluded from Group net debt resulting in an increase
in Group net debt offset by the cash receipt.

4.       Sainsbury's Bank plc commenced trading in February 1997 and was 55 per
cent owned by J Sainsbury plc and 45 per cent by The Governor and Company of the
Bank of Scotland.  The Governor and Company of the Bank of Scotland is a wholly
owned subsidiary of HBOS plc.  The Bank provides a range of quality financial
products including insurance, credit cards, savings and loans. With access to
over 16 million customers per week, the Bank model is an effective proposition.
As at 31 March 2006 Sainsbury's Bank had net assets of £178m and generated an
operating loss of £10m for the year to 31 March 2006.





Enquiries:

Investor Relations                                          Media
Lynda Ashton  / Elliot Jordan                               Pip Wood
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