Shares in over-50s group Saga rose on Tuesday after the firm revealed it was in “final negotiations” with FTSE 100 juggernaut Natwest for a banking partnership.
The London-listed company quickly climbed three per cent in early trading to 176.80p.
The firm posted the update ahead of their AGM on Tuesday, confirming it had “agreed heads of terms” with Natwest.
“This partnership would combine Natwest’s scale and banking capabilities with our customer insight and marketing strengths, and support our ambition to continue growing our Money business,” Saga said.
The collaboration would work alongside Natwest Boxed – a banking-as-a-service platform provided by the lender.
A Natwest Group spokesperson said: “We have a long-standing partnership with Saga and look forward to continuing to support its growth ambitions.
“The next stage of our partnership will serve to broaden and differentiate Saga Money’s product range to meet evolving customer needs, in partnership with Natwest Boxed. We will share more details in due course.”
Mike Hazell, Saga’s chief, said the group was “progressing well with medium-term plans” and the potential new partnership with Natwest was “another good example of this”.
Older generations left behind as branches shutter
In a trading update at the beginning of the year, Hazell laid out ambitions for the group to become the “largest and most-trusted brand for older people in the UK”.
A Natwest partnership follows the 20-year deal Saga struck with Belgian firm Ageas’ motor and home insurance division last year, as it seeks to widen its product range.
Joining forces with the lender marks the next step for Saga in scaling up its offering for older generations and expanding its product range.
Older generations have being particularly stung by the rapid shuttering of high street bank branches.
A report from the Financial Conduct Authority last month revealed seven per cent of account holders – 3.3 million – did not bank online, leaving them vulnerable to branch shutdowns.
But this figure jumped to 17 per cent among those aged 65 and over and surged to 46 per cent for those over 85.
Elsewhere, Saga posted a 14 per cent jump in booking revenues and 13 per cent in passenger numbers as high demand for holidays was maintained.
The firm’s river cruise load factor – which indicates how well it fills its cruise – rose to 77 per cent, compared to 74 per cent the prior year.
Travel booked revenue increased 10 per cent to £126m.
