Metris Posts Two Straight Profitable Quarters

Metris Companies chalked up two consecutive profitable quarters as the sub-prime issuer posted first quarter net income of $42 million, compared to a net loss of $83 million for 1Q/03. The sub-prime specialist also reported that charge-offs and delinquency headed south during the quarter. The managed net charge-off rate for the first quarter was 17.8%, compared to 21.7% in the previous quarter, and 18.0% for the first quarter of 2003. The managed delinquency rate was 10.4% as of March 31st, compared to 11.1% at year-end, and 11.5% posted one-year ago. Revenues for the quarter were $178.6 million, a 59.7% increase over $111.8 million for the quarter ended March 31, 2003. The increase is primarily due to a $157.0 million increase in securitization income, reflecting improved performance in the Metris Master Trust. This increase was partially offset by a $42.6 million reduction in credit card loan interest and fee income due to a $624.7 million reduction in average credit cards loans, and a $36.0 million reduction in enhancement services income due to the sale of our membership club and warranty business in the third quarter of 2003. Total expenses were $114.3 million for the first quarter, a decrease of $125.0 million from $239.3 million for the quarter ended March 31, 2003. For complete details on Metris’ first quarter performance visit CardData ([www.carddata.com][1]).

METRIS INCOME SNAPSHOT
1Q/03: -$82.5 million
2Q/03: -$24.7 million
3Q/03: -$75.0 million
4Q/03: +35.0 million
1Q/04: +$41.6 million
Source: CardData (www.carddata.com)

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

Vital and Planet Payment Team

Vital Processing Services has inked a deal with Planet Payment to introduce dynamic currency conversion authorization and clearing services. Vital’s Dynamic Currency Conversion service will allow merchants to offer international cardholders in the United States the option at the point-of-sale to pay in their local currency rather than U.S. dollars. Vital Processing Services(R) (Vital(R)) is a leader in technology-based commerce enabling services. A specialty multi-currency payment processor since 1999, Planet Payment is a market leader in providing localized pricing solutions, including multi- currency processing and time-of-sale, or “dynamic”, currency conversion.

Shell Beefs Up its Gift Card Program

Shell Oil has launched an enhanced gift card program. The new gasoline card has a new design, and the program will be promoted with new point-of-purchase materials. Other changes to the program also include two new vendors: SVM and Paymentech. SVM will be the Shell gift card provider and will handle production, distribution and marketing of the card. Paymentech will process the Shell gift cards at Shell locations across the USA and at other participating retail stores. Last year, the Shell gift card program generated more than $70 million in sales. Approximately 85% of those sales were categorized as incremental volume. With the new program, Shell expects gift card sales to increase by 12% to 15% in 2004.

MBNA Eyes Up the Chinese Credit Card Market for 07

MBNA announced it is probing the Chinese market following the recent opening of an office in Shanghai. The affinity credit card king currently holds more than $21 billion in total managed loans in the U.K., Canada and Spain. MBNA says the new office in China will be used to conduct market research, to further develop relationships with Chinese regulators and the banking community in China, and to design long-term strategies for entering China’s credit card market. At the end of 2003, MBNA had approximately 1,400 total international affinity contracts in place. In Europe, total managed loans reached $17.2 billion last year. In Canada, total managed loans for 2003 reached $3.6 billion. In February, Shanghai Pudong Development Bank and Citibank officially launched their first international credit card in China that can be settled both in renminbi and US dollars. Last month, American Express and the Industrial and Commercial Bank of China inked a deal to issue American Express branded credit cards in China that are also dual denominated. (CF Library 2/5/04; 3/30/04).

Capture Resource Completes Loyalty Card Acquisition

Philadelphia-based Capture Resource has completed its acquisition of the loyalty card services business from FL-based Catalina Marketing Corporation. This acquisition strengthens Capture Resource’s position as a leading provider of image and data capture, transaction processing and business process outsourcing solutions. In addition, it enables Capture Resource to offer a complete, reward processing outsourcing solution to clients seeking to capitalize on this growing trend in consumer marketing. Catalina Marketing Corporation was founded 20 years ago based on the premise that targeting communications based on actual purchase behavior would generate more effective consumer response. Capture Resource is a leading provider of innovative input management solutions including high-volume mail processing, high-speed forms and document scanning, automated data capture, and domestic and offshore manual data capture.

MBNA SCOUTING

MBNA is probing the Chinese market following the opening of an office in Shanghai. The affinity credit card king currently holds more than $21 billion in total managed loans in the U.K., Canada and Spain. MBNA says the new office in China will be used to conduct market research, to further develop relationships with Chinese regulators and the banking community in China, and to design long-term strategies for entering China’s credit card market. At the end of 2003, MBNA had approximately 1,400 total international affinity contracts in place. In Europe, total managed loans reached $17.2 billion last year. In Canada, total managed loans for 2003 reached $3.6 billion.

TSYS Realigns Business Units, Promotes 8

TSYS has created a new management committee, realigned many of its business units, and is promoting eight executives to lead the change. Four group executives were promoted to EVP including Gaylon Jowers, Connie Cartledge Dudley, Stephen Humber, and Colleen Kynard. The Company also named three new SVPs including Kenneth Tye, William Pruett, and James Lipham. Additionally, Dorenda Weaver has been promoted from group executive to chief accounting officer. Jowers will be responsible for sales, strategy and emerging markets; Cartledge Dudley will be responsible for product and client development. Humber has also been named CTO for software development. Kynard will be responsible for customer care. Yesterday, TSYS reported that its first quarter revenues increased 13.5% to $285.2 million, as net income rose 2.6% to $32.6 million. Separately, TSYS bid for the NYCE network has reportedly been rejected by First Data.

Panda Signs NPC Processing Contract

The Panda Restaurant Group has signed a multi-year credit card processing agreement with National Processing Company. Under the terms of the agreement, NPC will provide authorization and settlement services for MasterCard and VISA transactions. Panda Restaurant Group is the world leader in quality Chinese food service and one of the largest family-owned businesses in the nation. Panda Restaurant Group operates a successful chain of concepts, including Panda Express, Panda Inn and Hibachi-San. National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company, LLC is a leading provider of merchant credit and debit card processing.

Sabre’s Revenue Advantage Streamlines Card Payments

Sabre Travel Network has signed a deal with Merchant e-Solutions to enable its travel agency customers to process different card types through a single payment processor, settle their agency fees, and use Web-based reporting tools within the “Revenue Advantage” product. In addition, the Card Services feature integrates credit card processing into the agencies’ desktop. Merchant e-Solutions was founded in 1999 to provide technology-based solutions to the merchant payment acquiring industry, including banks and middle market retailers. Sabre Travel Network, a Sabre Holdings company, provides access to the world’s leading global distribution system (GDS) enabling agents at more than 53,000 agency locations worldwide to be travel experts.

Citigroup’s Card Profits Rise 35% in the First Quarter

Citigroup reported this morning that profits for its credit card business in North America increased 35% in the first quarter to $832 million, as revenues for the quarter increased 43%. The gain was driven by its recent acquisition of the Sears store and bank card portfolio and the Home Depot portfolio. Credit card outstandings for North America increased 23% over 1Q/03 to $142.3 billion, which includes $28.1 billion in private label card outstandings. Charge volume increased 19%, from $57.1 billion to $67.8 billion. Citi’s account base at the end of first quarter was 125.6 million accounts, a 45% gain over 1Q/03. However, the number of accounts dropped 3.6 million during the quarter. Citi’s charge-offs increased from 6.25% in the fourth quarter to 6.99% for 1Q/04. Charge-offs for bank credit cards was 6.60%, compared to 5.74% one-year ago. Delinquency (90+ days) dropped slightly from 2.18% for 4Q/03 to 2.10% for the first quarter 2004. Delinquency for bank credit cards was flat year-over-year and down 5 basis points from the fourth quarter. For complete details on Citigroup’s 1Q/04 performance visit CardData ([www.carddata.com][1]).

CITIGROUP
North American Credit Card Net Revenues
1Q/03: $635 million
2Q/03: $659 million
3Q/03: $819 million
4Q/03: $1017 million
1Q/04: $832 million
Source: CardData (www.carddata.com)

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

National City Card Volume Up 17%; Loans +7.5%

OH-based National City reported that its first quarter credit card outstandings rose 7.5% year-over-year to $2,443,320,152. However, card volume rose nearly 17% to $1.3 billion for the quarter, according to CardData (www.carddata.com). Sequentially, the issuer’s outstandings posted a 4.7% seasonal contraction. At the end of the first quarter, National City had 1,854,645 gross accounts and 1,123,106 active accounts. During the first quarter, National City and the Uniformed Firefighters Association of Greater New York launched an affinity “Gold MasterCard.” For complete details on National City’s 1Q/04 performance visit CardData ([www.carddata.com][1]). (CF Library 1/15/04)

NATL CITY CARD LOANS
1Q/03: $2,271 million
2Q/03: $2,417 million
3Q/03: $2,179 million
4Q/03: $2,558 million
1Q/04: $2,443 million
Source: CardData (www.carddata.com)

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

National Processing Q1 Net Income Rises 40%

Louisville-based National Processing reported first quarter revenues of $122.2 million, a 15% gain over one-year ago. Net income rose 40% to $12.0 million. Merchant Card Services dollar volume processed was $44.5 billion for the first quarter, representing an increase of 13% over the first quarter of 2003. MCS transactions processed were 1.1 billion for the first quarter, an increase of 17% over 1Q/03. The Company raised its revenue forecast for 2004 to a range of $500 million to $530 million. During the quarter, Retail Ventures, which operates 116 Value City Department Stores, 21 Filene’s Basement stores, and 142 DSW stores in 29 states, renewed its credit card processing. Borders Group signed a multi-year credit card processing agreement for its 445 Borders stores and 700 Waldenbooks stores in the USA. Kwik Trip and its 350 convenience stores. And, Mimi’s Cafe and its 82 bistro-like dining establishments inked a multi-year credit card processing agreement. For complete details on NPC’s 1Q/04 performance visit CardData ([www.carddata.com][1]).

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