Capital Card Enters the Enhancement Market

Sioux Falls-based CAPITAL Card Services has created a new subsidiary, Capital Enhancement Services, a service provider serving the consumer fee-based products and services market. CES will offer consumers products and services such as credit life insurance, card protection services, car rental and hotel discounts, gift services, roadside assistance, and identity theft solutions. CES plans to grow the consumer-direct business by way of Internet promotion, corporate alliances and direct mail channels.

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Wachovia Invests $78MM in Card Business in 06

Wachovia reported that it recorded $78 million of non-interest expense associated with its credit card business this year and that it has made a provision for credit losses of $37 million related to credit card outstandings for 2006. The bank entered the credit card market as a direct issuer beginning in January 2006. This coincided with Wachovia terminating its existing joint marketing agreement with MBNA as a result of the Bank of America/MBNA merger, which closed on January 1, 2006. Upon consummation of that merger, MBNA paid Wachovia a $100 million termination fee earlier this year. During the fourth quarter, Wachovia reported $36 million in costs relating to the new credit card business and $28 million for its credit card loss provision. At the end of 2000, Wachovia peaked at more than $8 billion in outstandings. Wachovia currently does not disclose credit card portfolio details. The bank sold its portfolio to Bank One in mid-2001. For complete details on Wachovia’s latest results visit CardData ([www.carddata.com][1]). (CF Library 4/9/01)

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

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CITI INTL 4Q/06

Citigroup reported that its international card business produced fourth
quarter net income of $231 million, a 36% drop from one-year ago and
down 20% from the prior quarter. However, revenues increased 26% to $837
million driven by a 21% increase in purchase sales and average loans,
partially offset by the continued revenue impact of industry-wide credit
conditions in the Taiwan cards market. Expenses grew 26%, reflecting the
integration of Credicard, continued investment in organic
growth and higher customer activity. Credit costs increased $272
million, primarily driven by target market expansion in Mexico,
which led to higher net credit losses and a $111 million pre-tax
addition to increase loan loss reserves. The account base grew 17%
year-on-year to 30.9 million compared to one-year ago. Purchase volume
for the fourth quarter was $23.0 billion. Delinquency (90+ days) was
2.29% compared to 1.95% for 4Q/05. Charge-offs were 5.39% compared to
3.08% for the year ago quarter. For complete detail’s on Citigroup’s
international cards performance, visit CardData (www.carddata.com.)

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TNB Acquires 21 CU Portfolios in 2006

Dallas-based TNB Card Services reports it acquired 21 credit card portfolios from credit unions in the U.S. last year. TNB, or Town North Bank, has nearly an estimated $1 billion in credit card outstandings and approximately 900,000 accounts at the end of 2006. In the latest round of acquisitions, card portfolios were acquired from Northeast Panhandle Teachers FCU of Perryton, Texas; Southern Lakes CU of Kenosha, Wisconsin; American FCU of Mission Hills, California; and Saugus FCU of Saugus, Massachusetts. TNB Card Services serves more than 450 financial institutions and manages more than 1.6 million cards.

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ImGlobal Extends Operation To United States

ImGlobal, a Merchant Services Provider, provides businesses with credit and debt card payment processing for the Internet, mail-order/telephone-order, and
point-of-sale transactions. The company has announced it will expand
operations to online businesses in the United States. ImGlobal Payments also offers multi-currency processing. The Company provides turnkey e-commerce solutions to thousands of business customers
around the world, has relations with some of the most powerful and
respected
banking entities in the world, and is able to out-bid and out-perform
much of the
competition in the merchant services industry.

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LINK Cash Withdrawals Up 7% in December

Over the holiday season, LINK, UK’s main ATM operation, disclosed record
ATM use over the 2006 holiday season. Despite dismal predictions regarding
consumer spending, over GBP 9,767,000,000 was withdrawn from LINK machines,
2,774,000,000 withdrawn during the week prior to Christmas, with
152,929,048
transactions. Compared with the 2005 holiday season, the number of
withdrawals
was up 7.3 % and averaged a GBP1 more per withdrawal (GBP 64). LINK network
connects
most of the UK’s 60,600 cash machines. During the past 5 years, the
network has
grown from 36,000 to over 60,600, of which 34,200 have no usage fee.
There are
over 130 million LINK cards in circulation from around 38 issuers.

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GULF BANK & AMEX

Gulf Bank and American Express have introduced a co-branded card. The
agreement enables Gulf Bank to market and distribute American Express
Cards through the Bank’s 37-branches across Kuwait. As part of the agreement, American Express will issue US dollar denominated cards from Bahrain and manage credit operations and customer service. Operating in 18 markets in the Middle East and North Africa, American Express Middle East issues dollar currency Credit and Charge Cards. Gulf Bank is Kuwait’s second largest and fastest growing commercial bank.

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Tower FCU to Deploy DCS’ CardWizard

Dynamic Card Solutions announced that MD-based Tower FCU has implemented DCS’ CardWizard to instantly issue debit cards to its more than 115,000 members. Following a successful pilot program, the credit union has instantly issued more than 9,500 debit cards. Tower has implemented CardWizard in all of its branches and trained 75 team members on the CardWizard system.Dynamic Card Solutions is a developer of instant issuance and PIN selection solutions for banks, credit unions and retailers. Tower FCU is the largest federal credit union in Maryland with over $1.5 billion in assets.

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National City Top 2 Million Accounts in Q4

OH-based National City crossed the two million account milestone during the fourth quarter as outstandings grew 7% and volume rose 13% year-on-year. According to CardData, the nation’s 19th largest bank credit card issuer had 1,181,752 active accounts in 4Q/06, or about 58% of total accounts. During the quarter National City also topped one million VISA gift cards since it introduced the prepaid product in 2002. Approximately 60% of gift cards were sold this year through National City branches and 38% were purchased in bulk by business customers, either online or by phone. Fourth quarter credit card outstandings were $2558 million and credit card volume for the quarter was $1852 million. The issuer’s cardbase grew 6.7% to 1,601,731 cards. For complete details on National City’s fourth quarter performance, visit CardData ([www.carddata.com][1]). (CF Library 10/20/06)

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

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Annual Rewards Spending to Hit $18B by 2010

Spending on credit card rewards programs by U.S. issuers is continuing to rise, growing at a CAGR of 27%. A new report predicts that rewards spending will rise to $18.4 billion in 2010 from $10.3 billion last year. The Aite Group study says that most of that growth will be driven primarily by the continuous, massive cannibalization of non-reward credit and debit cards by reward credit and debit cards. Other factors, such as the development of non-card-based reward programs or cost inflation in existing programs, will play a relatively modest role in driving up institutions’ spending. By 2010, Aite Group expects that institutions will spend $16.6 billion on general-purpose credit card rewards, up from $9.5 billion in 2006. Spending on debit card rewards will continue to grow to reach $900 million in 2010, up from $400 million last year. Spending on non-card reward programs will also grow from $400 million in 2006 to $900 million by 2010. By 2010, 95% of financial institutions’ spending on rewards will be driven by credit and debit card programs, down from 96% in 2006.

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Citibank Introduces the Citibest Account

With an attractive interest rate and flexible account management,
Citibank’s new Egyptian account, “Citibest,” offers up to an 8% interest rate, based on the tier, and is paid monthly. The new account also offers a free Citibank credit card, with no annual fee for the first year. With the no membership fee debit card, unless the balance falls below EGP 5,000, access to the account is allowed at more than 2,000 ATM’s throughout Egypt free of charge. “Citibest” is a tiered Egyptian Pound current account.

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