Sainsbury’s has announced the sale of the Argos Financial Services (AFS) card portfolio to NewDay Group.
The AFS cards support around 20% of Argos sales and are held by around two million Argos customers, who use Argos credit to manage the cost of their purchases.
The purchase price for the portfolio acquisition is expected to be around £720 million (€860 million), broadly in line with the expected net value of loan balances and associated provisions at the end of Q1 2025 (when completion of the beneficial title transfer is expected to occur).
New Partnership
Sainsbury’s also announced the creation of a partnership with NewDay to create a new Argos-branded digital credit proposition.
This will, in time, replace the current Argos card credit propositions with a wider choice of modern, flexible, and more convenient ways for customers to manage the cost of purchases.
This announcement follows the 20 June announcement of the sale of Sainsbury’s Bank’s personal loan, credit card and retail deposit portfolios to NatWest Group and the 25 September announcement of the sale of Sainsbury’s Bank’s ATM business to NoteMachine.
It is expected that both of these transactions will be completed in the first half of the 2025 calendar year.
Core Retail Business
In a statement, the retailers noted that the announcements are consistent with Sainsbury’s continued focus on its core retail business and will allow it to continue to benefit from financial service income streams that have a stronger connection to the retail offer.
It expects the combination of commission income from insurance, travel money and ATMs, alongside income from the NewDay partnership, to deliver a sustainable annual income of at least £40 million (€47.8 million) from financial services to Sainsbury’s in the financial year to March 2028.
AFS customers and Argos Card customers do not need to take any action as a result of this announcement, and there will be no immediate changes to customers’ existing terms and conditions.
Simon Roberts, Sainsbury’s CEO, said, “As we make progress with the plan for next-level Sainsbury’s, this is a key milestone in building our future model for financial services.
“It’s really important we work with partners who share our values and customer focus. NewDay is a complementary fit for us, as we strive to give customers at Argos the best value and choice and make it as easy as possible for them to buy the products they need.”
