BOQ buys Virgin banking

Richard Branson (pictured) is selling his Australian Virgin Money business to Bank of Queensland for $40 million. BOQ said on Wednesday it would snap up exclusive rights — for the next 40 years — to Virgin's brand in Australia, which has more than 150,000 credit card, insurance and superannuation customers. BOQ aims to use the Virgin brand as a distribution network to increase its consumer banking market share of about 2 per cent.

By InvestSMART · 11 Apr 2013

By InvestSMART ·
11 Apr 2013

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Frequently Asked Questions about this Article…

What happened in the BOQ buys Virgin Money Australia deal?

Bank of Queensland (BOQ) agreed to buy the Australian Virgin Money business from Richard Branson for $40 million, acquiring exclusive rights to the Virgin brand in Australia.

Who sold the Virgin Money Australia business and who bought it?

Richard Branson sold the Australian Virgin Money business and the buyer was Bank of Queensland (BOQ).

How much did BOQ pay and what exactly did it acquire?

BOQ paid $40 million and secured exclusive rights to use the Virgin brand in Australia for the next 40 years, including access to the business’s existing customers.

How many customers are part of the Virgin Money Australia business BOQ bought?

The Virgin business in Australia has more than 150,000 customers across credit cards, insurance and superannuation products.

Why is BOQ buying the Virgin brand — what’s the strategy?

BOQ plans to use the Virgin brand as a distribution network to grow its consumer banking footprint and increase its consumer banking market share, which is currently about 2%.

What does 'exclusive rights for the next 40 years' mean for everyday customers and investors?

It means BOQ has the exclusive licence to use the Virgin brand in Australia for 40 years, giving it long-term control of that brand as a channel to offer credit cards, insurance and superannuation products.

Could this acquisition affect BOQ’s market share in consumer banking?

BOQ’s stated aim is to use the Virgin brand to increase its consumer banking market share (around 2% today), so the deal is intended to support BOQ’s growth in retail banking.

What should everyday investors watch for after BOQ’s purchase of Virgin Money Australia?

Investors should watch whether BOQ successfully converts Virgin’s customer base, how the Virgin brand performs as a distribution channel, and whether these moves translate into measurable growth in BOQ’s consumer banking market share.