Bank of Queensland today announced it had confirmed the transfer of its credit card business to Citibank as part of an ongoing strategic arrangement for Citibank to provide BOQ-branded cards to its customers.
The agreement will result in Net Profit After Tax of approximately $26 million for Bank of Queensland.
The arrangement between BOQ and Citibank will 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.
All cards will still be branded BOQ, and all customer contact regarding the cards business will be through BOQ branches and offices, or Australian-based contact centres.
BOQ Managing Director David Liddy said today’s announcement follows months of fine-tuning the agreement and processes following an extensive tender process last year and the signing of a Heads of Agreement with Citibank on December 21, 2006.
“This is part of Bank of Queensland’s ongoing strategy to provide its customers with the best in access and customer service while providing the full range of finance products, whether it is insurance, margin lending, travel, equipment finance, debtor finance, and the more traditional banking products.
“This relationship allows us to play to our strengths – our strong and growing branch and business banking network, our high customer service levels, and our links to the community,” he 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 220 retail branches across Australia, 13 business banking centres and online support.
“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.”
Settlement will occur at the end of May 2007 when BOQ’s approximately $260 million credit card portfolio will transfer to Citibank.
Citibank Australia Chief Executive Officer Les Matheson said the agreement between BOQ and Citibank signalled a new era for financial services providers working together to achieve the best outcome for their customers as well as each other.
“This arrangement meets the joint goals of securing the best result for BoQ customers and our respective companies. It is our goal to jointly build a world-class credit card technology platform to underpin BOQ’s existing credit card portfolio and provide BOQ with an expanded range of credit cards within a cost effective infrastructure,” Mr Matheson said.
“As the largest worldwide credit card issuer, we are excited to be able to use our global best practice in credit card issuance to work with BOQ”.