Wesfarmers, the parent company of supermarket giant Coles, has concluded the receivables sale agreement relating to Coles credit card portfolio, between Citi and Coles.
Subsequently, a ten-year agreement between Citi and Coles for distribution of Coles branded credit cards has commenced.
As per the agreement, Coles will continue to distribute credit cards under its own brand and, after a transition period, Citi will be the credit card issuer and manage the operations of the credit card port folio.
The agreement, which was originally announced in November 2016, also included Citi acquiring the existing credit card receivables, with Coles to receive an ongoing share of risk – adjusted revenues. The portfolio had gross receivables of nearly $945m as at December 2016.
Wesfarmers said the net proceeds from the Citi transaction will be used to reduce debt.
Coles managing director John Durkan said that Coles remains committed to providing great value financial services to its customers, and that the partnership with Citi will provide a solid platform for ongoing strong growth of Coles credit cards.
"Coles services over one million customers across credit cards and car and home insurance, and we will continue to provide simple and competitively priced products that deliver value to Australian families," Durkan added.