Sainsbury’s sells Argos credit cards for £720m in financial services retreat
Sainsbury’s has struck a deal to sell its Argos credit card portfolio for roughly £720m as the supermarket withdraws further from financial services to focus on retail.
The grocer said the price tag was broadly in line with the amount of loan balances and associated provisions tied to the portfolio at the end of the first quarter of 2025, when it expects the deal to close.
The agreement, with London-based NewDay Group, marks the latest stage in Sainsbury’s strategic pivot to focus on its retail business following an unsuccessful attempt to inject more competition into the banking sector.
In June, the grocer inked a deal for Natwest to acquire most of Sainsbury’s Bank, then agreed to sell its ATM machines three months later.
Sainsbury’s paid Natwest £125m for its banking arm, although it expects Sainsbury’s Bank to eventually return the supermarket at least £250m of excess capital for distribution among shareholders.
That deal came four months after rival Tesco sold its core banking arm to Barclays for £600m as part of its “food first” push.
Sainsbury’s financial services arm now consists of commission income businesses, where it collects fees from partners who use its brand and physical locations.
The grocer expects annual income of at least £40m through March 2028 from insurance, travel money and ATMs, alongside fees from the NewDay partnership.
The Argos credit cards support around 20 per cent of the brand’s sales and are held by around two million of its customers, Sainsbury’s said.
It added that the deal will have no immediate changes for customers.
NewDay provides credit to shoppers. Two years ago, it took over John Lewis Partnership’s rewards card from HSBC, which itself has owned M&S Bank since 2004.
Over the last two decades, supermarkets have sought to earn more money from their customers beyond food and drink. These ventures have included telecommunications, broadband, restaurants, energy and more.
Sainsbury’s Bank and Tesco Bank both launched in 1997. Sainsbury’s ran its banking business as a joint venture with Bank of Scotland – part of Lloyds – until taking full ownership in 2014.