In 2008, Westpac purchased a fourteen-month lease of the Virgin Money brand license and credit card portfolio for $39 million, when their five-year partnership agreement expired. The two companies had previously agreed not to renew the partnership, and the new agreement halted Virgin Money’s negotiations to purchase the portfolio outright.

For the money, Westpac gained use of the portfolio and brand until June 2009, and Virgin Money agreed to stay out of the debit and credit card market.

“This new agreement allows Westpac to continue to manage the customer base and ensures that there are no interruptions to the credit card service,” the Virgin Money statement read. “The Virgin credit card will continue to operate normally for customers.

“During the extended licensing period no new Virgin credit cards will be issued and Westpac will issue customers with a competitive replacement offer.”

The initial agreement between the two companies dated from 2003, with Westpac capital and management, and the Virgin Money brand name. The original credit card carried no annual fee and a low interest rate, attracting 800,000 cardholders and awarding Virgin Money 6% of the Australian credit card market.

At the same time the original Westpac and Virgin Money agreement was expiring, Macquarie Group Ltd began cutting back on lending for both retail and wholesale mortgages. Macquarie provided the funding for Virgin Money’s residential mortgage business.