Bank of Queensland buys out Virgin Money Australia

3 years after vowing to take on Australia's big bank's, Richard Branson has sold the rights to Virgin Money's 150,000 credit card, insurance and superannuation customers, reports the Sydney Morning Herald.

The Bank of Queensland (BOQ) will now have exclusive rights to the Virgin brand for the next 40 years. It payed $30 million of the deal with its own stock and $10 million in cash. The BOQ will also have to pay a royalty fee and give the Virgin Group a seat on the Bank of Queensland Board.

However, according to BOQ managing director, Stuart Grimshaw, the Bank of Queensland plans to increase its consumer banking market share of about 2 percent with the new deal.

"It will enable us to sell BOQ-manufactured banking products marketed under the Virgin Money Australia brand to customers who would be unlikely to walk into one of our branches, and provides a low risk, high-potential entry point into online funds management distribution with an established brand," he said. 

Goldman Sachs analysts said yesterday, "The financial disclosure implies a fairly sizeable turnaround in Virgin's performance, with the business going from loss-making currently to broadly break-even by fy14 and then to an estimated profit of at least $6m by fy15

See Bank of Queensland and Virgin Money credit cards and compare the market here.

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