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Report: Sainsbury's mulls sale of mortgage unit

J Sainsbury PLC is looking for a possible sale of its mortgage unit in a bid to improve finances following its failed merger with Walmart Inc.'s Asda Stores Ltd., the Sunday Telegraph reported Sept. 15.

A deal reportedly could fetch the British retailer about £1.3 billion, according to the newspaper.

The reported move is a reversal from the company's strategy announced in its June 4 annual report to "continue to grow its mortgage business" over the coming year.

For the year ended March 31, the company's mortgage business lent £1.4 billion, with mortgage balances accounting for 21% of customer lending from 5% a year ago.

The proposed sale comes amid pressure to boost shareholder returns as the company's shares have lost 16% of their value in 2019, according to the report.

The retailer's rival Tesco PLC recently sold its own mortgage unit, Tesco Personal Finance PLC, to Lloyds Banking Group PLC for £3.8 billion in cash.

Sainsbury's said it does not comment on speculation.