St George Bank has taken a 5 per cent, $18 million stake in computer and Internet reseller Virtual Communities in an effort to expand its online financial offerings.
The investment will allow St George to offer special banking products to Virtual Communities' 200,000 Internet-connected customers, the first of which is to be jointly released in March.
St George will also gain access to five million potential broad-based Virtual Communities customers, including the Australian Council of Trade Unions and the Catholic and Anglican churches.
Virtual Communities, which provides affordable computer and Internet packages to the general community, has ambitious plans to connect another 200,000 Australian homes to the Internet by December 2002.
Company founder and CEO Chris Clarke says the partnership with St George will allow the expansion of Virtual Communities' information technology services, including computer and Internet sales, content provisions and the development of proprietary software.
The joint venture aims to deliver affordable banking services to homes in under-serviced areas of Australia, as well as financial services products to small- to medium-size businesses.
"This deal gives St George the opportunity to secure a significant foothold in this new and rapidly growing part of the Internet banking market " says Ed O'Neal, managing director and CEO of St George Bank. He adds that the attraction to Virtual Communities was primarily "its commitment to the community."
St George will assume a role on the Virtual Communities board and retains the option to acquire a further five per cent of the company.