Citibank Roots into the Subsoil of Australian Credit Card MarketCitibank was one of the credit card issuers to fall a victim to a mortgage crisis, which consequences affected the bank's financial standing. Citibank have incurred great losses. Now they are trying to straighten out their financial situation and consolidate their standing on the US credit card market. Now that US economy is shaky, in order to win back their leading positions Citibank's officials have chosen the strategy of establishing new branches world-wide. Australia has become an object of Citibank's new conquests. Citigroup and Suncorp Metway Ltd., an Australian finance, banking and insurance company, made a win-win deal. Citigroup is augmenting its credit card portfolio with 100,000 plastics. Suncorp is selling $230 million of credit card funds to Citi. So, what are the benefits both sides are expecting to get from this partnership? Suncorp is the 6th largest banking services company in Australia. Its financial standing is pretty stable; the company has a good reputation among Australians. So why would a successful and prosperous company decide to sell credit card assets $230 million worth? The thing is that Suncorp is planning to move up to another level on their national credit card market and challenge their competitors. Through cooperation with one of the major US credit card issuers, Australian company wants to increase the range of their credit products. With the credit card portfolio extension Suncorp Metway will be able to offer new deals of the world-class level to their existent loyal consumers and attract more new clients. Suncorp will get access to new, more favorable rewards programs. Soon their customers will get an opportunity to apply for much more enticing offers with cash back, point rewards, gasoline rewards cards, airlines card deals, and others. As for Citibank, this credit card issuer will also get sufficient credit card assets. Though the Suncorp's assets transferred to the Citibank's portfolio will keep the brand name of Suncorp on them, Citibank will be accountable for the issuing cards and all management processes. Besides, Citibank will get good profit from credit card commissions. And, between this and then, Citibank gets a chance to become the leading card issuer on the Australian credit card market. The collaboration with Suncorp is estimated to boost the Citibank's share on the market up to 9%. Citi, in its turn, will make Citibank credit cards and their benefits available for Australian credit consumers. But Citibank just cannot get enough. The head of Citibank Australia, Roy Gori, is determined to carve out a greater part of the Australian credit card market. Citibank is going to start a cut-throat competition for the leading position in Australian credit card industry. Their next step on the way to the top is expected to be a sales contract with David Jones credit card business, which gives about 30% of its revenues. Once the contract is signed, Citibank can get closer to the Commonwealth Bank that holds the biggest share (23%) of the Australian credit card market. While the Citibank and Suncorp are fighting for world domination in credit card industry, Australian credit card holders can expect to get the best credit cards in the nearest future.
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