bofa Archives • Page 50 of 58 • CardFlash®

3Q Delinquency

5, Country, Priority, UNITED STATESBy Robert McKinley 10/31/2002

Delinquency rates among the top U.S. issuers took a turn upward during the third quarter, indicating that a rise in charge-offs is not far behind. During the quarter, 30+ day delinquency among the top ten VISA and MasterCard issuers rose 37 bps since the second quarter, and 51 bps since last year. However excluding Providian and Direct Merchants, delinquency increased only 19 bps on average since 2Q/02, and actually declined 16 bps compared to 3Q/01. On average, 30+ day delinquency increased 8.5% during 3Q/02 compared to the same quarter one year ago. Among the top VISA and MasterCard issuers, MBNA, Bank One, Chase, BofA, and Fleet reported lower delinquency rates this year than 3/01. Meanwhile, Discover reported a 30+ day delinquency rate of 5.72% for the quarter ending 8/31/02, compared to 6.31% for the year-ago quarter. American Express delinquency rate stood at 3.2% for 3Q/02, compared to 3.1% for 2Q/02, and 3.2% one year ago. For more historical information on delinquency rates visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 3Q/02 2Q/02 1Q/02 4Q/01 3Q/01 Y/Y CHG
1. Citigroup: 90+ 1.88% 1.84% 2.13% 1.98% 1.82% +3.3%
2. MBNA: 30+ 4.79% 4.80% 4.97% 5.09% 4.90% -2.2%
3. Bank One: 30+ 4.05% 3.83% 4.27% 4.46% 4.25% -4.7%
4. Chase: 90+ 1.93% 1.98% 2.29% 2.22% 1.95% -1.0%
5. Cap One: 30+ 5.36% 4.54% 4.80% 4.95% 5.29% +1.3%
6. Providian: 30+ 11.23% 10.16% 10.22% 8.81% 8.66% +29.7%
7. BofA: 30+ 5.29% 5.54% 6.11% 5.87% 5.63% -6.0%
8. Household: 60+ 4.14% 3.90% 4.39% 4.10% 3.91% +5.9%
9. Fleet: 30+ 3.89% 3.74% 3.97% 4.05% 4.13% -5.8%
10. Dir Merch: 30+ 10.80% 10.20% 9.80% 9.70% 8.90% +21.3%
30+ DAY AVG*: 6.48% 6.11% 6.30% 6.13% 5.97% +8.5%
NR- not reported * 60+ day and 90+ day are not meaningful
SOURCE: CardData (www.carddata.com)

[1]: http://www.carddata.com

MS & BofA

5, Country, Priority, UNITED STATESBy Robert McKinley 10/16/2002

Microsoft and Bank of America have signed an agreement for BofA to advertise on and offer links to services across the MSN network of Internet services. Under the terms of the agreement, consumers who visit the popular CNBC on MSN Money Banking Center can access links to services and special offers from Bank of America. In addition to links and information from BofA, the CNBC on MSN “Money Banking Center” offers consumers account and loan information, expert commentary, and financial tools. Among Internet content networks, AOL has 35 million subscribers and MSN has 9 million.

Bank of America 3Q/02

5, Country, Priority, UNITED STATESBy Robert McKinley 10/15/2002

Bank of America reported this morning that card income was up 11%, driven by increased purchase volume. BofA ended the third quarter with $28.1 billion in outstandings, a 10% gain over 3Q/01. Pre-tax card income was $244 million for 3Q/02, compared to $239 million in the previous quarter, and $216 million one year ago. BofA’s charge-off rate declined from the second quarter, from 5.59% to 5.13%, but remains significantly higher than last year’s 4.81%. Delinquency improved across the board. For the third quarter BofA’s delinquency (30+ days) improved to 5.29%, compared to 5.54% in the previous quarter, and 5.63% one year ago. For complete details on Bank of America’s 3Q/02 performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

Total Security Protection

5, Country, Priority, UNITED STATESBy Robert McKinley 10/10/2002

Bank of America launched a “Total Security Protection” package for its credit cards and debit cards. BofA says the new cardholder package is one of its most significant consumer brand initiatives for this year, supported by a $26 million national advertising campaign as well as a consumer education promotion including free educational materials. The “Total Security Protection” package features six cardholder benefits including a new “Guaranteed Credit” feature. If a customer’s card is lost or stolen, the bank guarantees credit to the cardholder’s account by the end of the next business day in the event of unauthorized card transactions. Other features of the “Total Security Protection” package include: zero liability for any unauthorized card transactions reported within 60 days from statement date; fraud monitoring based on transaction patterns; “Photo Security” which puts the cardholder’s picture and signature on the front of the card; “Verified by Visa” for online protection; and the “Bank of America Privacy Policy for Consumers.” BofA will kick off the advertising campaign featuring television commercials nationwide beginning on Oct. 14. Other marketing initiatives include radio, outdoor boards, mall advertising, point-of-purchase and direct mail. Additionally, an advertising campaign targeting Hispanic consumers will kick off on Oct. 16.

Mini Card

5, Country, Priority, UNITED STATESBy Robert McKinley 10/02/2002

The success of Discover’s “2GO Card” has prompted one major VISA issuer to respond with its own mini card. Bank of America confirmed this morning the launch of a mini VISA, about half the size of a regular credit or debit card that can be attached to a key chain. Bank of America will retain their exclusive rights to issuing the mini card for a one-year period. Following the first year, under a license from Bank of America, VISA member banks will be permitted to issue VISA-branded mini cards, for which Bank of America will receive royalty payments. The mini card, which is being offered as a companion to full-sized credit and debit cards (it will share the same account number), is initially being distributed to select existing BofA consumer credit cardholders. By the end of the month, current and future credit card customers of BofA will be able to request a mini card. Bank of America will initially make the mini card only available to credit card customers, with an introduction of a debit card version slated for the future. In March, Discover launched a unique oval shaped credit card. The Discover “2GO Card” is housed in a protective case that attaches to a key chain, belt, or money clip. Users simply rotate the card out of its case and swipe. According to CardData ([www.carddata.com][1]) BofA has 22,394,554 cardholders at mid-year 2002. (CF Library 3/21/02)

[1]: http://www.carddata.com

Concord Lands Isaacson

5, Country, Priority, UNITED STATESBy Robert McKinley 09/13/2002

Concord EFS has hired Bond Isaacson, formerly of BofA, VISA, and IBM, as EVP. Isaacson was payments executive for Bank of America Corporation, where he was charged with positioning Bank of America as a payments leader.

Mid-Year Volume

5, Country, Priority, UNITED STATESBy Robert McKinley 08/30/2002

While bank credit card outstandings, among the nation’s top issuers, are growing at an 8% annual, charge volume is only growing about half as much. Charge volume handled by the twelve largest issuers, for the first two quarters of 2002, hit $549.2 billion compared to $529.0 billion for same period one year ago, for an annual growth rate of 3.8%. American Express and Discover reported slight declines in charge volume for the first half of this year. Among VISA and MasterCard issuers, sub-prime specialists Providian and Metris posted lower charge activity this year. The biggest gainer is Capital One, posting a 42% rise in volume for 2002 versus 2001. For complete details on 2Q/02 performance on the nation’s top 250 issuers visit CardData ([www.carddata.com][1]).

Top Bank Credit Card Issuers in the U.S.
(based on outstandings but ranked by YTD volume)
ISSUER 2Q/02 2Q/01 CHNG
1. AmEx $113.0b $114.4b – 1.2%
2. Citibank* $108.5b $ 106.8 + 1.6%
3. MBNA $ 74.4b $ 67.1b +10.9%
4. Bank One $ 68.4b $66.9b +2.2%
5. Discover $ 47.6b $47.9b – 0.6%
6. Chase $ 39.7b $33.8b +17.5%
7. Cap One* $ 32.5b $22.8b +42.5%
8. BofA $ 23.4b $23.4b NC
9. Household $ 17.1b $16.7b +2.4%
10. Fleet $ 11.4b $ 9.8b +16.3%
11. Providian $ 8.9b $14.9b -40.3%
12. Metris $ 4.3b $ 4.5b -4.4%
TOTAL: $549.2b $529.0b +3.8%

*Citibank includes Canada and Mexico as the company no longer discloses
its domestic portfolio; Cap One may include some international accounts
as the company no longer discloses its domestic portfolio
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

Top 12 2Q/02

5, Country, Priority, UNITED STATESBy Robert McKinley 08/29/2002

The nation’s top twelve issuers, based on outstandings, now comprise 81% of the U.S. bank credit card business and as a group grew 8% over the past twelve months. Capital One remains the fastest growing top issuer, driven by a $1 billion annual marketing budget and a focus on sub-prime prospects, which now make up at least 40% of its portfolio. Among issuers with less than $10 billion in outstandings, Target’s “smart VISA” and Sears National Bank’s “Gold MasterCard” have exploded over the past year signing up more than 16 million (net) new cardholders. Chase racked up a 32% growth rate at mid-year, primarily due to its acquisition of part of the Providian portfolio. Meanwhile, Providian declined 33% as it overhauls its business. MBNA, once a growth machine that rivaled Cap One, has slowed to a 7.5% annual growth rate. MBNA has distanced itself from the sub-prime market but continues to deliver solid profits. MBNA reported 2Q/02 profits of $457.8 million, a 21% increase over 2Q/01. Capital One’s profits were up 37% over the same period to $213.1 million. For complete details on 2Q/02 performance on the nation’s top 250 issuers visit CardData ([www.carddata.com][1]).

Top Bank Credit Card Issuers in the U.S.
(ranked by outstandings)
ISSUER 2Q/02 2Q/01 CHNG
1. Citibank* $108.2b $103.9 +4.1%
2. MBNA $ 75.8b $ 70.5b +7.5%
3. Bank One $ 66.8b $60.3b +10.8%
4. Chase $ 49.5b $37.4b +32.4%
5. Discover $ 49.4b $50.2b – 1.6%
6. Cap One* $ 45.1b $29.9b +50.8%
7. AmEx $ 31.6b $31.2b + 1.3%
8. BofA $ 27.1b $24.9b + 8.8%
9. Providian $19.9b $29.8b -33.2%
10. Household $15.4b $14.9b +3.4%
11. Fleet $14.7b $14.5b +1.4%
12. Metris $11.7b $10.1b +15.8%
TOTAL: $515.2b $477.6b +7.9%

[1]: http://www.carddata.com

2Q/02 Delinquency

5, Country, Priority, UNITED STATESBy Robert McKinley 08/26/2002

Delinquency rates among the top U.S. issuers began to slow during the second quarter, now growing at an annual rate of less than 8%. Among the top VISA and MasterCard issuers, Bank One/First USA, Capital One, BofA, and Fleet reported lower delinquency rates this year than 2Q/01. Sub-prime issuers Providian, Direct Merchants, and Household led the top ten issuers with the highest delinquency rates and the largest increases during 2Q/02, compared to same quarter one year ago. Over the past twelve months, delinquency (30+ day) among the nation’s top issuers, has increased 41 basis points, from 5.45% to 5.86%. according to CardData (www.carddata.com). Meanwhile, Discover reported a 30+ day delinquency rate of 5.63% for the quarter ending 5/28/02, compared to 5.84% for the year-ago quarter. American Express delinquency rate stood at 3.1% for 2Q/02, compared to 2.9% for 1Q/01.

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 2Q/02 1Q/02 4Q/01 3Q/01 2Q/01 Y/Y CHG
1. Citigroup: 90+ 1.84% 2.13% 1.98% 1.82% 1.72% +7.0%
2. MBNA: 30+ 4.80% 4.97% 5.09% 4.90% 4.57% +5.0%
3. First USA: 30+ 3.83% 4.27% 4.46% 4.25% 4.10% -6.6%
4. Chase: 90+ NR 2.29% 2.22% 1.95% 1.90% NA
5. Cap One: 30+ 4.54% 4.80% 4.95% 5.29% 4.92% -7.7%
6. Providian: 30+ 10.16% 10.22% 8.81% 8.66% 8.04% +26.4%
7. BofA: 30+ 3.78 4.16% 4.12% 3.95% 3.81% -0.8%
8. Household: 60+ 3.90% 4.39% 4.10% 3.91% 3.60% +8.3%
9. Fleet: 30+ 3.74% 3.97% 4.05% 4.13% 4.40% -15.0%
10. Dir Merch: 30+ 10.2% 9.80% 9.70% 8.90% 8.30% +22.9%
30+ DAY AVG*: 5.86% 6.03% 5.88% 5.73% 5.45% +7.5%
NR- not reported * 60+ day and 90+ day are not meaningful
SOURCE: CardData (www.carddata.com)

Charge-Offs 2Q/02

5, Country, Priority, UNITED STATESBy Robert McKinley 08/02/2002

Charge-offs among the top ten issuers of VISA and MasterCards increased by nearly 22% during the second quarter compared to 2Q/01, driven largely by the rise in sub-prime losses. Providian and Metris/Direct Merchants reported the largest jump in losses, 70% and 38%, respectively. Bank One/First USA and Fleet continued to report decreasing charge-offs over the past twelve months. Discover reported a 26.5% increase in losses for 2Q/02 compared to the second quarter of last year. For 2Q/02, Discover reported a charge-off rate of 6.30%, compared to 6.49% in the previous quarter, and 4.98% one year ago. For American Express, losses slowed from 6.5% in 1Q/02 to 6.2% in the second quarter. During 2Q/01, American Express experienced a charge-off rate of 5.7%. Among the top ten VISA and MasterCard issuers, the average charge-off rate for the second quarter came in at 7.95%, compared to 6.52% one year ago. If Providian and Metris/Direct Merchants are excluded, the average for the top issuers would be 5.87% for 2Q/02 compared to 5.50% for 2Q/01. For complete portfolio details on the top U.S. issuers visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MC ISSUER CHARGE-OFFS
2Q/02 1Q/02 2Q/01 ANN CHNG
1. Citigroup: 6.50% 6.41% 5.51% +17.9%
2. MBNA 5.09% 5.00% 4.82% +5.6%
3. First USA: 5.62% 5.69% 6.09% – 7.7%
4. Chase: 6.42% 5.87% 5.54% +15.9%
5. Cap One: 4.36% 4.00% 3.98% + 9.5%
6. Providian: 17.53% 15.05% 10.29% +70.4%
7. BofA: 5.59% 5.43% 4.94% +13.2%
8. Household: 7.54% 7.17% 6.82% +10.6%
9. Fleet: 5.81% 5.42% 6.31% – 7.9%
10. Dir Merch: 15.00% 13.00% 10.90% +37.6%
AVERAGE: 7.95% 7.30% 6.52% +21.9%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

BofA 2Q/02

5, Country, Priority, UNITED STATESBy Robert McKinley 07/15/2002

Bank of America reported this morning that it added more than $500 million to managed credit card outstandings during the second quarter, a 2% increase over the first quarter. The surge was driven by new account purchase volume and an increase in balance transfers. However, card profits were only up slightly from last year, and down by 21% compared to the first quarter. Over the past twelve months BofA’s credit card outstandings have increased 9%, to end the second quarter at $27.1 billion. Total card revenues for 2Q/02 were $821 million with net pre-tax income of $189 million. Net income for 1Q/02 was $240 million, and for 2Q/01 it was $183 million. However, charge-offs, as a percentage of average receivables, hit 5.59% for the second quarter compared to 4.94% one year ago. BofA’s delinquency rate also edged up from 5.45% one year ago to 5.54% for 2Q/02. The 30+ day delinquency rate was 3.78% for 2Q/02 compared to 3.81% one year ago, but 90+ day delinquency rose from 1.64% for 2Q/01 to 1.76% for second quarter 2002. BofA also noted this morning that active debit cards increased 8% and purchase volumes rose 15% from a year ago. For complete details on BofA’s latest portfolio performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

BofA Collections

5, Country, Priority, UNITED STATESBy Robert McKinley 07/08/2002

Bank of America said this weekend that $3 million in delinquent payments have been received through May via its Web site that enables delinquent cardholders to work out a payment plan online. The BofA MyEasyPayment.com was designed and developed by Douglas-Danielle, Inc., a Chicago-based direct marketing solutions provider. The site was launched in December 2001. Only customers with decent payment histories and bills that are slightly overdue are directed to the Web site. Upon logging in, they are taken through a fast, focused process. Customers are asked to indicate the reasons behind their delinquency and agree to recommended alternate payment terms. They can make a payment over the Web site via electronic check transfer or specify the day on which payment will be made.

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