Mr Davis is also the chairman of RadioData Communications and Future for Heroes, and a non-executive director of credit reference agency Experian and private healthcare brand Bupa.

Sainsbury’s said that a search to find his replacement will begin and a further announcement regarding timings of his retirement and news of his successor will be made in due course.

Mr Davis has been chairman of the board since May 2013 after Sainsbury’s purchased Lloyds Banking Group’s 50% stake in the bank for £248 million.

Sainsbury’s Bank was founded in 1997 as a joint venture between Bank of Scotland and Sainsbury’s. It then merged with Lloyds TSB as part of a government-arranged bailout after the 2008 financial crisis.