Bank of Queensland today announced it had signed an exclusive Heads of Agreement with Citibank for the sale of its credit card portfolio and an ongoing strategic alliance for Citibank to provide BOQ-branded cards to its customers.
Bank of Queensland Managing Director David Liddy said the proposed alliance between BOQ and Citibank followed an extensive tendering process and would provide the Bank with the product, back office and marketing support to ensure its card portfolio grows in line with the rest of the Bank’s rapid expansion.
“This proposal continues the Bank’s ongoing strategy of becoming a leader in financial product distribution,” Mr Liddy said.
“We have had significant growth in our card portfolio over the last 12 months, but we had reached the stage where major decisions had to be made regarding back office IT and infrastructure to support future growth in the portfolio.
“Bank of Queensland’s strategy is to become a leader in distribution, rather than the manufacture, of financial products and the proposed alliance with Citibank is in line with our ongoing desire to provide our customers with the “best of breed” when it comes to financial products,” Mr Liddy said.
Credit cards will be provided by Citibank through a “white-labelled” distribution arrangement and will be branded Bank of Queensland. They will be supported by BOQ’s extensive network of almost 220 retail branches, 13 business banking centres and online support. Citibank will provide an Australian-based customer contact centre to support the card portfolio.
“Citibank is an expert in credit cards, including product development and delivery as well as support and sales which will build on Bank of Queensland’s successful franchise model.
“This will be supported by the large Queensland base, and the expanding national base of the bank,” Mr Liddy said.
“Bank of Queensland customers will continue to have the advantages of a BOQ card, but with greater support, better product range and more extensive national and international systems.”
Citibank Australia Chief Executive Officer Les Matheson said the proposed alliance was positive for both BOQ and Citibank, bringing together two organisations with significant and complementary strengths.
“We are delighted to have the opportunity to partner with Bank of Queensland in this alliance,” Mr Matheson said.
“Bank of Queensland has a strong and growing distribution capability and Citibank N.A. is the world’s largest credit card issuer with highly developed expertise serving customers in Australia and around the globe. Through this alliance, the parties will be able to provide BOQ card customers with an expanded range of credit cards within a cost effective infrastructure.”
Negotiations of formal agreements are expected to be completed by the first quarter in 2007.
Bank of Queensland
Bank of Queensland is Australia’s fastest growing regional bank with more than 200 branches throughout Queensland, NSW, Victoria, Western Australia, Tasmania, ACT and the Northern Territory. In the last five years it has more than doubled its branch numbers, its assets under management have more than trebled to $16 billion. Bank of Queensland has won Best Regional Bank in the AB&F Banking and Finance Awards twice in the last four years and is recognised as one of the highest customer service banks in the country.