AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Sainsbury's sells Argos Financial Services card portfolio to NewDay for approximately £720 million.
- Partnership with NewDay to develop a modern Argos-branded digital credit offering for flexible purchases.
- Financial services to contribute sustainable annual income of at least £40 million by March 2028.
J Sainsbury PLC (LSE:SBRY) has announced a significant step in reshaping its financial services division with the sale of its Argos Financial Services (AFS) card portfolio to NewDay Group, a leading consumer credit provider. The AFS card portfolio, which is integral to supporting roughly 20% of Argos sales and serves nearly two million Argos customers, has been sold for approximately £720 million. This sale aligns with Sainsbury's broader strategic shift to concentrate on its core retail business while continuing to benefit from financial service streams connected to retail.
The agreed purchase price of £720 million reflects the expected net value of loan balances and associated provisions, with the full title transfer anticipated by the end of Q1 2025. The transaction promises to streamline Sainsbury’s financial services operations while also offering a cash injection that will bolster the company’s retail-focused growth efforts.
In addition to this portfolio sale, Sainsbury’s and NewDay have formed a partnership to introduce a new Argos-branded digital credit solution. This innovative digital offering will eventually replace the existing Argos card, providing customers with a broader range of flexible, modern credit options to help manage their purchases. The new digital credit platform aims to make purchasing through Argos more convenient and adaptable to customers' changing financial needs.
This transaction with NewDay follows a series of divestments within Sainsbury’s financial services division, as announced earlier in the year. In June 2024, Sainsbury’s disclosed the sale of its personal loans, credit cards, and retail deposit portfolios to NatWest Group. More recently, in September 2024, the company confirmed the sale of Sainsbury’s Bank’s ATM business to NoteMachine. Both transactions are expected to be completed by the first half of 2025, underscoring Sainsbury’s steady progress in refocusing on its primary retail business and creating a more streamlined and efficient financial services framework.
Sainsbury’s anticipates that these strategic transactions will deliver a stable annual income stream of at least £40 million from financial services by the end of the fiscal year in March 2028. Income will primarily come from partnerships related to insurance, travel money, ATMs, and the new NewDay arrangement.
Consistent with the company's June 2024 update, Sainsbury’s Bank is expected to return excess capital of at least £250 million to Sainsbury’s, which the company plans to redistribute to shareholders. The specifics on timing for this capital return will be detailed further in the Preliminary results scheduled for April 2025.
For current AFS and Argos cardholders, Sainsbury’s confirmed that there will be no immediate changes to existing terms or conditions. Customers can continue using their cards as usual, with no required action resulting from the announcement.
