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Virgin Money Australia continues to struggle despite an overall improvement on its bottom line performance over the last year.
The group has filed accounts with ASIC showing a net asset deficiency of $7.6 million at the end of March and has only continued to trade because of financial support from its Richard Branson-backed British parent, the Daily Telegraph reported today.
The company reported a net profit of $11.1 million after booking a $38 million pre-tax gain on the sale of its credit card portfolio to Westpac.
Despite the recent challenges, Virgin remains committed to the market, recently announcing an alliance with Citibank in a bid to re-introduce competition into the market.
Under the 10 year profit sharing contract Citibank will develop Virgin branded credit cards and mortgages that will go head to head with the big four.
Specific details around the distribution of Virgin mortgages are yet to be confirmed.
According to a Citibank spokesperson under the contract, Citibank will provide funding, infrastructure and banking networks while also creating new credit cards, retail deposit accounts and mortgages.
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