Marks & Spencer in talks with HSBC to create financial services “superapp”
Marks & Spencer (M&S) is on the brink of a major transformation in its banking division as it reportedly nears a seven-year agreement with HSBC to create a financial services and loyalty “superapp.”
According to reports, M&S and HSBC have been in discussions for some time and are now close to finalizing a deal before their current contract expires. The goal is to build a “superapp” that will combine M&S’ payments and financial services with its Sparks loyalty program.
M&S Bank, a joint venture with HSBC, currently has over 3 million customers and offers a range of products including personal loans, travel insurance, store payment cards, and a buy-now pay-later scheme. The bank became a wholly-owned subsidiary of HSBC in 2004 after being sold.
While M&S declined to comment on the reports, sources suggest that a public announcement with more details of the partnership is expected in April. It remains unclear if M&S will take an ownership position in the future.
This news comes on the heels of Tesco and Sainsbury’s announcing their exits from the banking business. Sainsbury’s revealed plans to phase out its banking operations, while Barclays acquired Tesco’s retail banking business for around £600m.
The banking sector has seen increased consolidation this year, with Nationwide agreeing to a £2.9bn takeover of Virgin Money and Coventry Building Society in talks to merge with The Co-operative Bank.
Investment banking boutique Fenchurch Advisory Partners has been advising M&S on the negotiations with HSBC. Additionally, M&S recently announced a change in leadership, with chief executive Katie Bickerstaffe stepping down after two years and Stuart Machin taking over.
M&S’ shares have seen a significant increase over the past year, driven by strong earnings in its food business despite inflationary pressures and the cost-of-living crisis. The potential partnership with HSBC signals a new chapter for M&S in the financial services industry.
