J Sainsbury PLC on Thursday said it has sold the credit card portfolio of its Argos general merchandise arm for £720 million, creating a partnership with buyer NewDay Group.

The London-based supermarket chain said the price received for the card portfolio of Argos Financial Services was broadly in line with the expected net value of loan balances and provisions at the end of the first quarter of next year, when the transfer is expected to take place.

Sainsbury shares were down 0.8% to 262.40 pence early Thursday in London. The company has a market capitalisation of £6.18 billion.

The Argos credit cards support around 20% of Argos sales and are held by about 2 million Argos customers, Sainsbury said. The grocer has agreed a partnership with NewDay to create a new Argos-branded digital credit offering, which eventually will replace the current Argos credit card.

NewDay Ltd is a specialist consumer credit platform provider. It already provides credit services for retailers including John Lewis Partnership and AO World PLC.

The move by Sainsbury comes as the major UK supermarket chains reverse their moves into financial services to focus on food sales.

Back in June, Sainsbury agreed to sell the personal loan, credit card, and retail deposit portfolios of Sainsbury’s Bank to NatWest Group PLC and last month announced the sale of the bank’s ATM business to NoteMachine. These two deals are expected to complete in the first half of next year, Sainsbury said on Thursday.

Sainsbury said it still expects Sainsbury’s Bank to return excess capital of at least £250 million to the company, which it then intends to return to shareholders. It promised details on the timing of this with its annual results in April.

Rival supermarket chain Tesco PLC sold most of Tesco Bank to Barclays PLC back in February.

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