Retail and mining conglomerate Wesfarmers has struck a 10-year deal for global credit card provider Citi to distribute its Coles branded credit cards.
Coles has been issuing credit cards for more than 20 years but the supermarket giant said on Thursday that Citi will now manage its credit card business under the new agreement.
Citi will acquire the existing credit card receivables of about $880 million and Coles will receive a share of the risk-adjusted revenues.
Coles has more than one million customers across credit cards and car and home insurance. The group ended its long-term financial partnership with GE Capital last year.
Wesfarmers said the net proceeds from the Citi transaction, which it did not detail the amount, will go towards reducing debt.
The transaction is expected to be completed by February, but it is not expected to materially affect Coles' earnings for the 2017 financial year.
Wesfarmers, which also owns Bunnings, Kmart, Target and Officeworks, confirmed on Wednesday that it is looking to offload its east coast coal operations.
