Diners Club relaunch a failure

John Kavanagh
For Citigroup's charge card business Diners Club, 2014 was another year of falling receivables, income and profit in Australia. Citi's big investment in relaunching the business in 2012 has not worked.

Diners Club Pty Ltd reported a net profit of A$5.6 million for the 12 months to December - down 43 per cent on the $9.9 million it earned in 2013.

Revenue was down 12.8 per cent from $52.2 million in 2013 to $45.6 million last year.

Receivables due from card members fell 7.5 per cent from $171.7 million in 2013 to $158.7 million last year.

Diners chopped into its marketing budget to reduce expenses. Marketing spend was cut from $15.6 million to $12.3 million.

However, this was offset to some extent by an increase in loan impairment expenses and fraud cost.

Diners in Australia has shrunk by half in recent years. In 2008 it had receivables of around $280 million. In 2012 its net profit was $11.7 million.

In 2012 Citi relaunched the Diners brand, moving the business to Citi's more modern credit card platform and launching a new advertising campaign.

It overhauled its frequent flyer program and upgraded its service proposition for corporate customers.

And it launched a new companion card, offering Diners' members a Citibank-issued MasterCard on the same account.

None of this appears to have had a positive impact.