UK Charge-Offs Rise Again in Q1

Charge-offs for credit card-backed bonds in the U.K. continued to deteriorate during the first quarter, hitting a record 6.7%, compared to 4.7% one-year ago and 5.8% for the prior quarter. Delinquencies also edged upward during 1Q/06 to 3.6% compared to 3.3% in the prior quarter. According to FitchRatings, there were significant rises in charge-off levels in virtually all trusts across the quarter with the exception of Pillar Funding. A common observation among originators is that the increased charge-offs are more the result of higher balances being charged-off rather than more customers defaulting. Originators are using a variety of strategies to limit the losses by introducing more proactive account management policies. Meanwhile, the monthly payment rate on credit card ABS soared in the first quarter to 19.5%, compared to 15.9% for the fourth quarter. The Fitch “Yield Index” stood at 20.8% at the end of 1Q/06, rising from 19.3% at the end of December 2005.

Details

BMW and American Express to Launch Cards

BMW Financial Services has inked a deal with American Express to introduce a two rewards credit cards. The card will target BMW’s 1.5 million customers in Great Britain. The deal includes issuance of a credit card for the “Mini” automobile in addition to the BMW card. BMW currently offers credit cards in the U.S., Germany, Japan, Australia, New Zealand, Austria and Spain. The U.S. BMW card is issued by BMW Bank of North America. BMW reportedly is planning to launch a credit card in the UAE later this year. BMW is also offering other financial services including savings products and insurance.

Details

Encore Considers a Possible Sale

San Diego-based Encore Capital Group has formed a Special Committee to consider strategic alternatives, including the potential sale of the company. The consumer debt management company says there is tremendous value in the Company that is not currently being fully realized in the public markets. The collection specialist recently reported first quarter revenues of $60.5 million, a 20% increase over the same period of the prior year. However, net income dropped 37% to $4.7 million during the same period. The decline was blamed on a lower revenue recognition rate; investments in new portfolio liquidation strategies; adoption of SFAS 123; and the impact of the Ascension Capital bankruptcy services business. Gross collections were $87.6 million, a 33% increase over 1Q/05. During the quarter, Encore invested $27 million to purchase $560 million in face value debt. For complete details on Encore’s first quarter performance, visit CardData ([www.carddata.com][1]). (CF Library 5/10/06)

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

Details

G-CARD

A multi-use debit card provider has entered the global marketplace with a prepaid debit/payroll card. The new “gCard” costs between $15 and $25 depending on quantity. Other fees include $3 for an ATM withdrawal, $3 for Canadian POS purchases, $3 for monthly maintenance and Internet access, $3 for a card to card transfer, and $1 for an ATM/POS decline. The new “gCard” enables cardholders or businesses to transfer money to the cards via the Internet or at their bank. Individuals can use the gCard worldwide to withdraw cash from any ATM machine. All ATM cash withdrawals are automatically in a country’s local currency. Users can also track the card’s balance, along with any related transactions, on the secure “gCard” Web site.

Details

HID Global Hires a Marketing Copywriter

Doug Wheaton has joined HID Global as Marketing Communications Copywriter and brings 10+ years of extensive marketing, business development and public relations experience. In addition to an M.B.A from Pepperdine University, his broad background includes roles in public relations and business development at Credit Suisse First Boston in Asia, a marketing manager position at SunGard Trading Systems and other marketing and promotional responsibilities in the ecommerce field.

Details

AmbironTrustWave Acquires Lucid Security

Chicago-based AmbironTrustWave has acquired Philadelphia-based Lucid Security, a provider of “Intrusion Prevention System” and “ipANGEL” for an undisclosed amount. ipANGEL leverages predictive technology and employs an “asset-centric” approach by first identifying the unique vulnerabilities of the information assets it protects and then profiling and filtering only those aspects that pose a unique threat to those assets. AmbironTrustWave will continue to support the ipANGEL brand for the Lucid Security product line. AmbironTrustWave is a provider of information security and compliance management technology and solutions.

Details

Barclays & Xansa Extend Partnership

Barclays and outsourcing and technology company Xansa are extending their
relationship through a new joint venture and will continue to supply
applications management and major change programs to Barclaycard. The
contract has also been expanded to encompass some of the services
currently delivered to the wider Barclays Group by Xansa. Xansa has been
working with Barclays for over 15 years and became
Barclays’ first significant IT outsourcing partner when the Barclaycard
joint venture with Barclays was established in 2002.

Details

Charge-Offs Hover at 10-Year Lows

Charge-offs among “prime” credit card-backed securities continued to ride at the lowest levels in more than ten years during the first quarter. For April, charge-offs in the “prime” asset-backed credit card securities market stood at 3.19% compared to 6.20% one-year ago. Roughly half of the charge-offs observed in a prime portfolio are associated with personal bankruptcy filings. According to the latest “Fitch Credit Card Index,” “prime” delinquency (60+ days) increased dropped to 2.37% compared to 2.72% for April 2004. Fitch says the average charge-off rate for the first quarter was 3.19%.

ABS HISTORICAL
Month Charge-Offs Delinquency
Apr 04: 6.57% 3.08%
Apr 05: 6.20% 2.72%
Apr 06: 3.19% 2.37%
Source: Fitch Ratings

Details

Revel MasterCard to be Unveiled

SD-based Fishback Financial Corporation is set to roll-out the “Revel MasterCard” next week. The new card is a prepaid card and already has 61 retail locations lined up. Fishback projects 750 partner locations by mid-2007. The card also offers “Revel Advance,” which allows qualified customers to establish a small dollar line of credit. The “Advance” is loaded on to the “Revel Card,” with the balance to be repaid in installments over a 4 to 10 week period. Fishback Financial has assets of more than $1.2 billion.

Details

Asia Payments Announces New CEO

Asia Payment Systems has appointed KK Ng to President and Chief Executive
Officer and a member of the Board. Ng was the CEO of InterPay
International Group whose acquisition by Asia Payments was announced last
week. Ng will lead an expanded management team that will integrate the
existing Asia Payments and InterPay operations as well as developing a new
vision, strategy and plan to spearhead the Company’s growth. Ng has over
28
years of experience in building, operating and turning around payment
businesses. He was a Director of Maestro International Inc., a subsidiary
of MasterCard International Inc., between 1992 and 1995, and served as an
Alternate Director on the MasterCard Asia Pacific Board, 1991-1995. He was
an independent consultant in MasterCard Advisors, a division of MasterCard
International Inc., during 2003-2005. He holds a B.Sc. (Engineering)
degree
from University of London and M.Sc. (Administrative Sciences) from The City
University Graduate Business School, London.

Details