Citi and Virgin to challenge Big Four
(22nd September 2009 – Australia) Citibank and Virgin have signed an exclusive ten year profit sharing deal to create new credit cards, retail deposit accounts and mortgages, in a move to challenge the dominance of Australia’s Big Four banks.
The deal comes one year after Virgin Money’s lucrative contract ended with Westpac. The free, Virgin branded credit card enticed more than 750,000 accounts, but the accounts are now the sole possession of Westpac since the contract with Virgin ended.
Citibank chief executive, Roy Gori, told The Australian newspaper that the bank has a clear direction set out for the collaboration and hopes to achieve a market share of 13-14 percent.
Currently CBA and Westpac lead the credit card market with 17.4 percent and 16.6 percent, respectively, while NAB has 11 percent.
As well as Citibank-Virgin credit cards, savings and deposit accounts, the joint venture will develop a Virgin Blue credit card; a card that will compete directly with the points based systems Qantas-associated credit cards currently provide.
The joint venture will also launch Virgin-branded mortgages to compete with the Big Four banks.
Mr Gori told the Australian, that there was room for an alternative provider, despite the domination of the big banks.
This is the best time to look at launching these products because there is a demand for an alternative because there has been so much consolidation, Mr Gori added.
Citibank’s aim is to lure 500,000 customers to the new credit card in the medium term, with the goal of having launched its first credit card in July next year.
Citibank chief executive, Roy Gori, told The Australian newspaper that the bank has a clear direction set out for the collaboration and hopes to achieve a market share of 13-14 percent.
Currently CBA and Westpac lead the credit card market with 17.4 percent and 16.6 percent, respectively, while NAB has 11 percent.
As well as Citibank-Virgin credit cards, savings and deposit accounts, the joint venture will develop a Virgin Blue credit card; a card that will compete directly with the points based systems Qantas-associated credit cards currently provide.
The joint venture will also launch Virgin-branded mortgages to compete with the Big Four banks.
Mr Gori told the Australian, that there was room for an alternative provider, despite the domination of the big banks.
This is the best time to look at launching these products because there is a demand for an alternative because there has been so much consolidation, Mr Gori added.
Citibank’s aim is to lure 500,000 customers to the new credit card in the medium term, with the goal of having launched its first credit card in July next year.
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