CyberCash and the U.K.’s Barclays Bank went on-line yesterday with an electronic wallet to enable consumers to make small purchases between 25p and Pound Sterling 10.00. The micropayment technology is being offered to visitors of the U.K.’s leading virtual mall, ‘BarclaySquare’. Barclays says more than 1.5 million consumers have visited the Web site since its launch two years ago. Among the first BarclayCoin transactions was a purchase of a Winnie the Pooh Bear via Pooh Corner.
Allied Irish Banks, p.l.c. (AIB) (NYSE: AIB; AIBPR; FMBPR) today announced that its wholly-owned US subsidiary, First Maryland Bancorp, has reported earnings of $53.5 million for the three months ended September 30th, 1997, a 58.8% increase on 1996. These results include an after-tax gain of $17.4 million from the sale of bankcard loans. Excluding this gain, earnings for the quarter were $36.1 million reflecting an underlying growth of 10% in the core business of both First Maryland and Dauphin.
During the quarter First Maryland sold $360 million of bankcard loans originated under a co-branding arrangement with Bell Atlantic to Chase Manhattan Corporation. The sale resulted in a pre-tax gain of $28.2 million including attributable allowance for credit losses and costs associated with the sale.
For the nine months period ended September 30th, 1997, First Maryland announced earnings of $123.5 million, representing a 28.2% increase over the comparable period in 1996. Excluding the gain from sale of bankcard loans, earnings for the nine months ended September 30th, 1997 were $106.0 million, an increase of 10.1%.
On July 8, 1997 AIB Group completed its merger with the former Dauphin Deposit Corporation which is now a wholly owned subsidiary of First Maryland Bancorp. The third quarter results include the impact of the acquisition of Dauphin which performed strongly and in line with our expectations.
Highlights of First Maryland’s underlying performance for the third quarter were strong growth in retail lending (+14.5%) and commercial lending (+8.5%) since December 1996; and good growth in deposit service charges (12%) and trust and advisory fees (22%) over the comparative period in 1996.
Commenting on the results, Tom Mulcahy, AIB Group Chief Executive said: “The strong third quarter earnings were attributable to continued growth in our core retail, corporate and trust businesses, while we also made significant progress in the integration of the Dauphin franchise. With the completion of the Dauphin acquisition, we are now positioned to take advantage of our leading market share in the Harrisburg/Baltimore corridor while continuing the process of integrating the Dauphin franchise.”
Asset quality remains strong with non-performing assets of $89.7 million amounting to 0.52% of total assets. Non-performing loans of $72.0 million were covered 244% by total provisions of $175.5 million.
First Maryland Bancorp is the holding company for the First National Bank of Maryland, Dauphin Deposit Bank, The York Bank and First Omni Bank. Headquartered in Baltimore, First Maryland operates 291 branches and nearly 400 ATMs from southern Pennsylvania through Maryland and the District of Columbia and into northern Virginia. First Maryland currently has assets of $17.3 billion.
FIRST MARYLAND BANCORP AND SUBSIDIARIES
Consolidated Statements of Condition
September 30 December 31 September 30
1997 1996 1996
Cash and due from banks $963,763 $842,032 $826,779
Money market investments 101,233 75,260 46,896
available-for-sale 4,320,034 2,552,620 2,801,694
Loans held-for-sale 434,438 150,742 159,885
Loans, net of unearned income of
$175,408, $130,026 and $121,251:
Commercial 2,827,189 1,731,031 1,787,747
Commercial real estate 2,228,170 1,453,244 1,418,975
Residential mortgage 1,045,602 833,045 838,208
Retail 2,509,844 1,380,767 1,340,145
Bankcard 142,510 596,474 468,190
Leases receivable 730,501 438,060 399,495
Foreign 394,473 365,824 362,401
Total loans, net of
unearned income 9,878,289 6,798,445 6,615,161
Allowance for credit losses (175,462) (154,802) (170,529)
Loans, net 9,702,827 6,643,643 6,444,632
Premises and equipment 195,026 106,701 106,254
Due from customers on acceptances 10,987 8,725 9,878
Intangible assets 1,076,027 98,847 107,840
Other assets 459,991 312,454 338,039
Total Assets $17,264,326 $10,791,024 $10,841,897
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest bearing deposits $2,629,276 $2,248,252 $2,224,720
Interest bearing deposits 9,028,348 5,135,616 5,130,774
Interest bearing deposits in
foreign banking office 194,640 113,830 142,896
Total deposits 11,852,264 7,497,698 7,498,390
Federal funds purchased and
securities sold under
repurchase agreements 1,349,423 533,547 609,980
Other borrowed funds, short-term 805,393 821,477 647,236
Bank acceptances outstanding 10,987 8,725 9,878
Accrued taxes and other liabilities 585,150 297,525 309,501
Long-term debt 409,971 229,742 554,729
Guaranteed preferred beneficial
interests in Company’s junior
subordinated debentures 295,758 147,113 –
Total Liabilities 15,308,946 9,535,827 9,629,714
Redeemable preferred stock 7,847 7,700 9,000
Total stockholders’ equity 1,947,533 1,247,497 1,203,183
Total liabilities, redeemable
preferred stock and
stockholders’ equity $17,264,326 $10,791,024 $10,841,897
FIRST MARYLAND BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
(in thousands) (in thousands)
Interest and fees on loans $200,495 $130,600 $476,305 $384,869
Interest and dividends on
Taxable 66,044 40,341 143,530 125,008
Tax-exempt 5,186 1,572 7,970 4,842
Dividends 1,388 455 2,761 1,035
Interest and fees on loans
held-for-sale 7,554 2,467 11,550 6,571
Interest on money market
investments 2,606 3,054 15,786 11,334
Total interest and
dividend income 283,273 178,489 657,902 533,659
Interest on deposits 96,626 51,736 197,807 152,706
Interest on federal funds
purchased and other
short-term borrowings 31,814 15,330 74,395 54,710
Interest on long-term debt 7,596 9,457 16,668 27,782
Interest on guaranteed preferred
beneficial interests in Company’s
junior subordinated debentures 5,327 – 14,735 –
Total interest expense 141,363 76,523 303,605 235,198
NET INTEREST INCOME 141,910 101,966 354,297 298,461
Provision for credit losses 7,434 2,000 26,634 6,000
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 134,476 99,966 327,663 292,461
NON INTEREST INCOME
Gain on sale of bankcard loans 28,155 – 28,155 –
Service charges on
deposit accounts 26,437 20,376 69,978 58,791
Mortgage banking income 18,110 10,904 30,981 22,810
Trust fees 14,330 7,470 31,177 20,920
Servicing income 8,489 7,401 20,515 19,236
Credit Card income 7,385 2,056 12,545 8,262
Securities gains (losses), net (230) (126) 278 175
Other income 16,830 9,303 43,276 29,865
Total non interest income 119,506 57,384 236,905 160,059
NON INTEREST EXPENSES
Salaries and wages 74,141 47,325 168,005 134,458
amortization expense 16,218 2,680 20,722 6,018
Other personnel costs 14,835 9,691 37,553 34,664
Equipment costs 11,895 8,103 28,949 24,474
Net occupancy costs 10,550 8,511 26,689 23,683
Other operating expenses 41,624 26,713 88,479 78,206
Total non interest expenses 169,263 103,023 370,397 301,503
INCOME BEFORE INCOME TAXES 84,719 54,327 194,171 151,017
Income tax expense 31,190 20,625 70,715 54,712
NET INCOME $53,529 $33,702 $123,456 $96,305
Mondex said yesterday it will begin to incorporate a new high security chip, the ‘Mondex H8/3109’, into more than 500,000 Mondex cards to be issued by year’s end. The new chip, developed by Hitachi, utilizes public key cryptography. The Mondex card is a reloadable, multi-currency smart card which allows up to five different currencies to be carried on the card at any one time in separate electronic pockets. Mondex said more than one million reloadable cards will be produced this year with a projected 5 million cards next year.
M.A.I.D plc have signed a commercial contract with Unisource NV to provide business news to mobile devices. The Project initially will enable users of the Nokia 9000 Communicator mobile phone to download NewsSearch Pro, a news-alerting product developed exclusively for the Unisource partnership, on a pay-per-view basis. NewsSearch Pro utilises the Smart Access payment technology system designed by Unisource. The Smart Access Pilot is being showcased this week by Nokia at Telecom Interactive ’97 in Geneva, Switzerland.
Each of the Nokia 9000 users will receive a NatWest bank account available through a Mondex card. In the trial, users can access their bank accounts, deposit, withdraw cash and check the balance their accounts. They also are able to pay for the M.A.I.D?s NewsSearch Pro service and buy new software applications for their Nokia 9000 Communicators over the web, using the Mondex card.
The user inserts the Mondex card into the smart card reader, plugs the reader into the Nokia 9000 Communicator and downloads the credit over the air. The money can then be used for live, online payments over the Internet whilst mobile.
Dan Wagner, Chief Executive of M.A.I.D plc, said; “The Unisource Smart Access technology provides a way to generate revenue from mobile data devices, complementing and extending our subscription services. Having provided a free quote service to mobile phone users for nearly a year, we are enthusiastic about the opportunities for generating revenue through the advent of new technology and the fast growing mobile marketplace”
Julian Wilson, Director Smart Access of Unisource, said; “M.A.I.D have used our software to enable a pay-per-view business service for mobile users. I applaud M.A.I.D’s ability to optimise their business intelligence service for this new expanding customer base. We look forward to extending this to additional Internet access devices supported by new smart card purse schemes.”
CobWeb, Inc. announced today it has signed a contract to provide its Merchant Gateway e-commerce application to SPRYNET’s Private Label Community (PLC) program.
SPRYNET’s PLC program allows original equipment manufacturers (OEMs), corporations and affinity groups to build a default Internet online service using the SPRYNET/CompuServe network as a foundation. Some 170 OEMs and value added resellers (VARs) sell equipment with SPRYNET’s Internet service product already loaded.
CobWeb, with its Merchant Gateway application, will allow the OEM partners to make fully secure online purchases available to consumers through their customized PLC. The Merchant Gateway application in turn makes use of the CyberSource Internet Commerce Service to offer the highest level of security to SPRYNET’s OEM partners. The Merchant Gateway application, which will be up and running in early October, will be one of the main components offered in the PLC Program.
Included in this service is a unique fraud screening module that checks each transaction against a specialized application designed to detect the likelihood of consumer fraud. This capability helps to insure OEM’s against credit card fraud on the Internet.
“The Merchant Gateway product is a natural choice for this kind of application,” said Stuart White, vice president and general manager for CompuServe/SPRYNET Seattle. “It makes the transaction completely easy, secure and bullet-proof for the end user. And the easier and safer it is for the consumer, the more sales it generates.”
Richard Lancaster, CEO of CobWeb, Inc., also lauded the ease of use and transaction safety ensured by the partnership. “Merchant Gateway allows SPRYNET to offer their customers a solution that provides transaction processing across the Internet in a highly secure environment, using today’s technologies,” he said. “Neither the individual OEMs or the consuming public have to own any proprietary technologies to be assured of the safety of this solution.”
Merchant Gateway is the first combined software application and financial service that unites all aspects of Web commerce and electronic order processing, including credit card transactions, electronic software distribution and hard goods fulfillment and distribution. CobWeb is actively building a nationwide network of resellers who provide Internet access, fulfillment and distribution services as well as merchant banking services.
Founded in 1969, CompuServe Incorporated provides the world’s most comprehensive online/Internet access through its two brands, CSi and SPRYNET. Through CompuServe, its Japanese licensee NIFTY SERVE and its affiliates around the world, more than 5 million home and business users in more than 185 countries are connected online and to the Internet. CompuServe Network Services is a leading network integrator, providing more than 1,200 companies around the world with complete, fully integrated Internet, Intranet, and Extranet connectivity solutions. CompuServe Network Services also provides the network for CSi and SPRYNET. With world headquarters in Columbus, Ohio, the CompuServe organization includes offices in the United Kingdom, Germany, France, Switzerland and the Netherlands.
Incorporated in 1994, CobWeb has become a leading provider of Web and Internet products and services. CobWeb has built more than 75 Web sites, including Microsoft’s Site Builder Network and Visual Tools Web sites. It manages more than 200 business Web sites in the Northwest as an Internet Service Provider in partnership with AccessOne, and creates and develops e-commerce solutions for businesses worldwide, including the Merchant Gateway software application.