Revenue earned by the card industry last year is roughly $165 billion. However, pre-tax net income after all expenses (charge offs, operating expense and cost of funds) falls to $121.0 billion. According to R.K. Hammer there can be a large difference between these two metrics. Risk-Adjusted” is just that, the default risk (net charge offs)…
Western Union reported second quarter (Q2/15) revenues declined 2% year-on-year (YOY), primarily due to the impact of the stronger U.S. dollar, however on a constant currency basis, Q2/15 revenues increased 4% YOY.
Visa Europe’s owners, including 3,078 banks and payment providers from 37 European countries, are mulling a sale to Visa, Inc. The deal would be valued somewhere between $15 billion and $20 billion.
Visa Europe (VE) is poised to top € 2 trillion of POS purchase transaction (PTV) volume in 2018 and easily exceed € 2.2 trillion the following year. VE will likely, in 2015, capture more than €1 in €6 of everyday consumer spending across Europe, according to CardData. Forecaster RAM Research’s CAGR Corner computes VE’s compound annual growth rate (CAGR) at 9.74% and sees nothing on the horizon to dampen the current trajectory.
Visa Europe (VE) says point-of-sale (POS) euro volume jumped 8.7% in 2014, to a record €1.4 trillion. With the current trajectory
VE will likely, in 2015, capture more than €1 in €6 of everyday consumer spending across Europe.
Profits (after tax) among the nation’s top four bank credit card issuers declined 9.0% in the fourth quarter (Q4/14), compared to one year ago (Y/Y) and down 4.3% sequentially (Q-Q). However, after adjusting for abnormal loan loss provisions in Q4/13, profits were up an estimated 8.4% Y/Y.
The payments cards industry profitability has been in the dumper since 2009, but is slowing crawling its way out over the past six years. Payment investment banker and guru R.K. Hammer says this year credit card ROA’s could top 4%.
Visa profits for the fourth calendar quarter increased 11.5% year-on-year (Y/Y) to $1.57 billion and soared 46.0% sequentially. Visa took a $450 million pre-tax litigation provision, or $283 million on an after-tax basis, in the third quarter related to the interchange multi-district litigation case.
Synchrony Financial (f/k/a GE Capital Retail Finance) posted a 19.9% surge in fourth quarter (Q4/14) profits to $531 million, but slipped slightly from the prior quarter. Period-end loan receivables growth for the retail payment card giant remained strong at 7%, driven by purchase volume and average active account growth.
The number of payment card portfolios sold in 2014 dipped to just five portfolios worth $2.7 billion. This was down significantly from year end 2013 and the record card deals done in 2012. In 2013 an estimated $17.2 billion in 10 portfolios were done, not including numerous tiny card portfolio sales ( < $10MM).
CardWeb.com’s CardExecs database of payments industry movers and shakers today features Robert Hammer, CEO and Founder of R.K. Hammer.
While profits among the world’s largest payment card networks rose 4.4% in the third quarter (Q3/14), the figure for the fourth quarter will be relatively flat in the fourth quarter (Q4/14), compared to one year ago. During 2015, profits will near $5.0 billion in Q2/15 or Q3/15.