J Sainsbury PLC has finalized the sale of its Argos Financial Services (AFS) cards portfolio to NewDay Group for £720 million. This transaction broadly reflects the expected net value of loan balances and associated provisions and is scheduled to conclude in 2025. AFS cards account for approximately 20% of Argos sales and are held by around 2 million Argos credit customers. As part of this deal, Sainsbury's will provide a corporate loan of up to £60 million to NewDay in the form of a transferable vendor loan note. The two companies will also form a new Argos-branded digital credit proposition to replace existing Argos card options.
This sale is part of Sainsbury's broader strategy to exit non-core financial services. The company expects to generate at least £40 million in annual income from financial services by March 2028, combining commission from insurance, travel money, ATMs, and the NewDay partnership. Sainsbury's Bank is also anticipated to return at least £250 million in excess capital to shareholders. This follows the sale of its bank business to Natwest in June and its ATM operations to NoteMachine in September of the previous year.
NewDay's CEO, John Hourican, stated that this partnership presents a significant opportunity to collaborate with a leading UK retailer and accelerate the growth of their credit business. Sainsbury's CEO, Simon Roberts, emphasized that NewDay is a complementary fit, aiming to provide Argos customers with better value, choice, and ease of purchase. London-based NewDay currently has £4.3 billion on loan and serves 3.7 million customers.
