Diebold Profits Fall 77%; ATM Sales Up 4%

Diebold reported that its net income for the fourth quarter plunged 77% to $14.6 million due to sluggish U.S. sales and restructuring costs. However, ATM product sales in the fourth quarter increased 4% to $299 million. But, ATM services revenues were off slightly to $238 million. Diebold says ATM orders experienced solid order growth in the EMEA and the Asia Pacific region, offset by a decline in North America. The Company says it has devised a multi-year profit improvement plan that encompasses significant cost reduction as well as improved pricing. This plan entails eliminating more than $100 million from its cost structure within three years. Diebold also said this morning it has reached an agreement to sell its Sumter, SC-based manufacturing plant to Porter’s Fabrications, a current supplier to Diebold. The Company says it expects Financial self-service revenue (ATM) to be flat for 2006. For complete details on Diebold’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

DIEBOLD FINANCIAL SELF-SERVICE
(Product Sales)
4Q/04: $281.3 million
1Q/05: $173.3 million
2Q/05: $221.0 million
3Q/05: $194.2 million
4Q/05: $298.9 million
Source: CardData (www.carddata.com)

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

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Gift Cards Hit Full Stride in 2005

A new study has determined that 82% of respondents gave or received gift cards this holiday season and 66% both gave and received them. The report from Accenture also found that 81% of respondents said they have already used their gift cards, 43% said they planned to spend their gift cards within one month of receiving them and 63% said they planned to spend the entire value of their gift cards in a single store visit. Almost three-quarters of respondents said they gave between one and six cards this holiday season and 91% said they went to a store to purchase a a gift card. Accenture says 85% of respondents purchased gift cards for amounts up to $50, but only 12% spent between $51 and $100 and 3% spent more than $100.

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Dynamic Card Solutions 05 Revenue Up 50%

Colorado-based Dynamic Card Solutions, developer of CardWizard, reports 50% revenue growth last year, driven by orders from large regional banks. In addition to new contracts, numerous existing customers expanded their deployments of DCS’ instant issue solutions as well. Current customers include banks and credit unions such as Wachovia, Virginia Commerce Bank, Desert Schools Federal Credit Union and Dallas Telco Credit Union. Dynamic Card Solutions is a developer of instant issuance and PIN selection solutions for banks, credit unions and retailers.

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FDIC Helps Consumers Fight Identity Fraud

The FDIC has released an on-line multimedia education tool that consumers can use to learn how to better protect their computers and themselves from identity thieves. Some of the steps outlined in the presentation that consumers can take to help safeguard their computers and their personal information from identity theft are: never provide personal information in response to an unsolicited telephone or Internet request; never provide a password over the phone or in response to an unsolicited Internet request; review account statements regularly to ensure all charges and transactions are correct; and use a firewall and anti-virus and spyware protection software.

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Brits Card Borrowing Weaker than Expected

New borrowing on credit cards in the UK totaled GBP 7.7 billion in December, 3% higher than the previous month. However, the increase in net lending of GBP 237 million compared with a recent average increase of GBP 162 million. The British Bankers Association says consumer borrowing in December was weaker than seasonally expected. Growth in card borrowing was the same as in December 2004, whilst demand for structured personal loans was particularly weak. Last year credit card borrowing fell in three separate months, dropping a record GBP 146 million in August. The BBA collects data from Abbey National, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland.

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DEC DEBT

New borrowing on credit cards totaled GBP 7.7 billion in December, 3% higher than the previous month. However, the increase in net lending of GBP 237 million compared with a recent average increase of GBP 162 million. The British Bankers Association says consumer borrowing in December was weaker than seasonally expected. Growth in card borrowing was the same as in December 2004, whilst demand for structured personal loans was particularly weak. Last year credit card borrowing fell in three separate months, dropping a record GBP 146 million in August. The BBA collects data from Abbey National, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland.

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Card Outstandings Post Worst Gain in 05

Last year turned out to be the worst year for growth in credit card outstandings in the industry’s history. The top five issuers, who control more than $400 billion in outstandings, posted a paltry 1% year-on-year gain, with Citigroup and Discover posting losses of about 3%. Chase assumed the number one position in 2005 after its merger with Bank One, posting a 5% annual gain. Bank of America also posted a respectable 3.8% gain, not including the results of its recent merger with MBNA. The overall sluggish performance of the Top 5 is attributed to debt consolidation via lower-rate home equity loans, debit card usage, and the backlash over aggressive pricing including high punitive APRs and associated fees.

Top 5 U.S. Issuers Managed Outstandings
Rank/Issuer 4Q/04 4Q/05 Chng
1. Chase $135.4b $142.3b +5.1%
2. Citi $118.1b $113.7b -3.7%
3. BofA $ 58.6b $ 60.8b +3.8%
4. Disc $ 48.3b $ 46.9b -2.9%
5. Cap One $ 48.6b $ 49.5b +1.9%
TOTAL: $409.0b $413.2b +1.0%
Source: CardData (www.carddata.com)

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Citibank Expands Texas ATM Network

Citibank has added approximately 150 ATMs to its distribution network in Texas bringing its total to 500 ATMs with free access for its customers. Citibank customers now have free access to over 500 ATMs in the Texas including ATMs at Citibank locations, Murphy USA Stations located in Wal-Mart Super Center and Neighborhood Market parking lots, Minyard Food Stores, and MoneyPass ATMs. Citibank has approximately 10,000 proprietary ATMs around the world including 2700 in the U.S.

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American Express Launches RED to Fight AIDS

American Express has teamed with U2’s Bono and Bobby Shriver, Chairman of DATA (Debt, AIDS, Trade, Africa), to produce money to help fight AIDS in Africa. The new “American Express RED3” card will be available March 1st according to last week’s CardFlash International. For every pound spent on the card, American Express will donate a minimum of 1% to the Global Fund. Spending above GBP 5,000 per year will generate an increase of 1.25% on all spending above that amount and an extra GBP 5 will be given to the Global Fund if cardholders make their first purchase on the card within the first month. “RED” is a global initiative whose primary objective is to engage the private sector in the fight against AIDS in Africa by channeling funds from the sale of “RED” products directly to the Global Fund To Fight AIDS, Tuberculosis and Malaria.

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