First-quarter USB Payment Services profits dropped 5% year-on-year (YOY) as return-on-average-assets (ROAA) slipped 78 basis points (bps) compared to the fourth-quarter (4Q/18). The weakness for U.S. Bank was driven by softness in the consumer credit card business. However, strong merchant acquiring and corporate card activity mitigated an otherwise very soft quarter.
Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services, consumer lines of credit and merchant processing.
Payments Revenue
Total revenues for USB Payment Services in 1Q/19 increased 1.1% YOY to $1475 million, compared to $1562 million for 4Q/18 and $1459 million for 1Q/18. In the first quarter of 2015, USB posted $1244 million in total payment services revenue, according to CardData.
USB credit card and debit card fee revenue for 1Q/19 decreased 5.9% YOY to $301 million, compared to $377 million for 4Q/18 and $320 million for 1Q/18. In the first quarter of 2015, USB posted $238 million in credit and debit card fee revenue.
USB corporate payment services revenue for 1Q/19 increased 5.2% YOY to $162 million, compared to $163 million for 4Q/18 and $154 million for 1Q/18.
USB merchant processing revenue for 1Q/19 increased 4.1% YOY to $378 million, compared to $389 million for 4Q/18 and $363 million for 1Q/18.
Payments Profit Metrics
Net income for USB Payment Services in 1Q/19 decreased 5.0% YOY to $322 million, compared to $396 million for 4Q/18 and $339 million for 1Q/18. In the first quarter of 2015, USB posted $262 million in payment services net income.
USB return on average assets (ROAA) for Payment Services for 1Q/19 decreased 78 bps sequentially and down 42 bps YOY to 3.38%, compared to 4.16% for 4Q/18 and 3.80% for 1Q/18.
USB net interest margin (NIM) for Payment Services for 1Q/19 increased 10 bps sequentially but down 49 bps YOY to 7.68%, compared to 7.58% for 4Q/18 and 8.17% for 1Q/18.
USB Credit Card Metrics
Average credit card outstandings for USB Payment Services in 1Q/19 increased 6.1% YOY to $22.6 billion, compared to $22.4 billion for 4Q/18 and $21.3 billion for 1Q/18. For the first quarter of 2015, USB averaged $17.8 billion in credit card outstandings.
Total credit card GDV for USB Payment Services in 1Q/19 increased 3.7% YOY to $39.5 billion, compared to $42.9 billion for 4Q/18 and $38.1 billion for 1Q/18. For the first quarter of 2015, USB posted $28.1 billion in total credit card GDV.
Consumer credit card GDV for USB Payment Services in 1Q/19 was flat YOY to $22.6 billion, compared to $25.9 billion for 4Q/18 and $22.4 billion for 1Q/18. For the first quarter of 2015, USB posted $15.3 billion in consumer credit card GDV.
Corporate credit card GDV for USB Payment Services in 1Q/19 increased 8.3% YOY to $16.9 billion, compared to $17.0 billion for 4Q/18 and $15.6 billion for 1Q/18. For the first quarter of 2015, USB posted $12.8 billion in corporate credit card GDV.
Debit card GDV for USB Payment Services in 1Q/19 increased 1.8% YOY to $17.4 billion, compared to $19.1 billion for 4Q/18 and $17.1 billion for 1Q/18. For the first quarter of 2015, USB posted $14.7 billion in debit card GDV.
Credit card charge-offs for USB Payment Services in 1Q/19 rose 16 basis points (bps) sequentially and increased two bps YOY. For 1Q/19 the charge-off ratio was 4.04%, compared to 3.88% in the prior quarter, and 4.02% one-year ago. For the first quarter of 2015, USB posted 3.71% in credit card charge-offs.
USB Merchant Volume
USB Payment Services merchant acquiring volume in 1Q/19 jumped 7.1% YOY to $110.1 billion, compared to $107.8 billion for 4Q/18 and $102.8 billion for 1Q/18. For the first quarter of 2015, USB posted $93.7 billion in merchant acquiring volume.
USB Payment Services merchant transaction volume in 1Q/19 soared 11.2% YOY to 1453 million, compared to 1487 million for 4Q/18 and 1307 million for 1Q/18. For the first quarter of 2015, USB handled 1106 million in merchant transactions.
U.S. Bank Payment Services Metrics
USB Total Payment Services Revenue
1Q/15: $1244 million
1Q/18: $1459 million
1Q/19: $1475 million
USB Credit + Debit Card Fee Revenue
1Q/15: $238 million
1Q/18: $320 million
1Q/19: $301 million
USB Corporate Payment Revenue
1Q/18: $154 million
2Q/18: $158 million
3Q/18: $169 million
4Q/18: $163 million
1Q/19: $162 million
USB Merchant Processing Revenue
1Q/18: $363 million
2Q/18: $387 million
3Q/18: $392 million
4Q/18: $389 million
1Q/19: $378 million
USB Payment Services Net Income
1Q/15: $262 million
1Q/18: $339 million
2Q/18: $358 million
3Q/18: $390 million
4Q/18: $396 million
1Q/19: $322 million
USB Payment Services Return on Average Assets (ROAA)
1Q/18: 3.80%
2Q/18: 3.93%
3Q/18: 4.17%
4Q/18: 4.16%
1Q/19: 3.38%
USB Payment Services Net Interest Margin (NIM)
1Q/18: 8.17%
2Q/18: 7.69%
3Q/18: 7.74%
4Q/18: 7.58%
1Q/19: 7.68%
USB Average Credit Card Outstandings
1Q/15: $17.8 billion
1Q/18: $21.3 billion
1Q/19: $22.6 billion
USB Total Credit Card Gross Dollar Volume (GDV)
1Q/15: $28.1 billion
1Q/18: $38.1 billion
1Q/19: $39.5 billion
USB Consumer Credit Card Gross Dollar Volume (GDV)
1Q/15: $15.3 billion
1Q/18: $22.4 billion
1Q/19: $22.6 billion
USB Corporate Credit Card Gross Dollar Volume (GDV)
1Q/15: $12.8 billion
1Q/18: $15.6 billion
1Q/19: $16.9 billion
USB Corporate Debit Card Gross Dollar Volume (GDV)
1Q/15: $14.7 billion
1Q/18: $17.8 billion
1Q/19: $17.4 billion
USB Credit Card Charge-Offs
1Q/15: 3.71%
1Q/18: 4.02%
1Q/19: 4.04%
USB Merchant Acquiring Volume
1Q/15: $93.7 billion
1Q/18: $102.8 billion
1Q/19: $110.1 billion
USB Merchant Transactions
1Q/15: 1106 million
1Q/18: 1307 million
1Q/19: 1453 million
