Argos owner Home Retail Group has set aside £25m to pay compensation for mis-sold payment protection insurance (PPI).

It commissioned an independent investigation in response to the FCA’s industry-wide review and will start to pay compensation for the product, which was sold through its financial services arm to Argos and Homebase store card holders. The figure is about a quarter of its annual profits.

The retailer also revealed that it will be paid £11m by Allianz from a profit-share agreement relating to warranty products written until June 2010, which are now in run off.