UPDATE 1-Australia's David Jones picks Amex for credit card

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SYDNEY, Feb 20 (Reuters) - Australian department store chain David Jones Ltd (DJS.AX: Quote, Profile, Research) said on Wednesday it had chosen American Express Co (AXP.N: Quote, Profile, Research) as its partner for a credit card venture.

The retailer, which has said it sees significant long-term growth opportunities in its financial services business, had originally short-listed Amex and Citigroup (C.N: Quote, Profile, Research) as possible partners for the card.

"This is a significant opportunity for our company to build a future revenue stream in a segment of the financial services market where consumer brands are currently under-represented," David Jones Chief Executive Officer Mark McInnes said in a statement. Australia's A$37 billion ($34 billion) credit card market has been growing at an average rate of 18 percent annum over the past decade. But unlike the United States, the Australian market is underdeveloped in consumer co-branded credit cards, David Jones said in the statement.

The new David Jones American Express card will be launched in time to capitalise on the busy Christmas trading period, which last year generated sales of about A$36 billion.

David Jones' financial services business will deliver at least 7.5 percent earnings before interest and tax growth (EBIT) a year over fiscal year 2008, it said in the statement.

EBIT from the American Express agreement is expected to grow to A$38 million over the first five years of the deal. ($1=A$1.09) (Reporting by Denny Thomas; editing by Jonathan Standing)