Providan’s Securitized Charge-Offs Jump in December

Providian reported this week that charge-offs for its securitized card loans increased during December. However, delinquency decline 33 basis points during the month. For December, Providian posted a charge-off rate of 17.55, compared to 16.16% for November, 17.19% in October, and 15.65% in September. Providian’s delinquency rate dropped to 11.94%. compared to 12.27% for November, 12.38% for October, and 12.17% in September. During November, Providian began processing account reages during the month in which a qualifying payment is made instead of in the following month. Providian also made an adjustment to the delinquency status of certain past due customers enrolled in debt management arrangements in November. Earlier this week, Providian reported net income for the fourth quarter of $67.1 million, a five-fold increase over one-year ago, but down from the third quarter’s $85.3 million. For complete details on Providian’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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SECURITIZED PVN 2003
Month Charge-offs Delinquency
Jan 03 19.38% 13.26%
Feb 03 18.23% 12.89%
Mar 03 19.89% 12.46%
Apr 03 19.80% 12.27%
May 03 20.40% 11.92%
Jun 03 16.76% 11.98%
Jul 03 17.39% 11.96%
Aug 03 17.04% 12.12%
Sep 03 15.65% 12.17%
Oct 03 17.19% 12.38%
Nov 03 16.16% 12.27%
Dec 03 17.55% 11.94%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com
[2]: http://www.cardweb.com/images/c/charts1/securitized_dec03.jpg

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Capital One Profits Up 11%, U.S. Cards Up 13%

Capital One reported that its profits declined for the fourth consecutive quarter, however, compared to 4Q/02 the issuer’s profits are up 10.8%. For the fourth quarter, Capital One posted net income of $265.7 million, compared to a revised $275.5 million in the third quarter, $286.8 in the second quarter, and $309.1 million in the first quarter of 2003. During the fourth quarter, Capital One grew its managed loan portfolio by $4.0 billion and its domestic card loans by nearly $2.0 billion, compared to the previous quarter. Year-over-year, Capital One’s managed loans have increased 19.3%, and U.S. card loans have risen 13.3%. Marketing expenses for the fourth quarter declined $25.9 million since the third quarter to $290.1 million. One year ago, Capital One spent $210.8 million in marketing expenses. Capital One added 632,000 net new accounts, ending the quarter with 46.7 million accounts. The managed charge-off rate declined to 5.32% in the fourth quarter, from 5.44% in the previous quarter, and 6.21% for 4Q/02. The net charge-off rate for U.S. credit cards was 6.16% for both the fourth and third quarters, and 6.90% one-year ago. The managed delinquency rate (30+ days) declined to 4.46% from 4.65% at the end of the previous quarter. One year ago delinquency was 5.60%. The managed delinquency rate (30+ days) for U.S. credit cards was 4.60% for the fourth quarter and 4.88% at the end of the previous quarter. One year ago delinquency was 6.07% for U.S credit cards. At the end of the fourth quarter Capital One had $46,279,000,000 in U.S. card loans. For complete details on Capital One’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Acxiom Holds Steady, Signs a Chase Card Deal

AR-based Acxiom reported fourth quarter revenue of $255.2 million, a slight decline from one-year ago. However, net earnings inched up slightly to $19.9 million. During the fourth quarter, Acxiom expanded its services agreement with JPMorgan Chase to include the financial institution’s credit card customer database. Other contracts completed during the quarter included Equifax in the United Kingdom and AutoNation, Bank One, and Microsoft. For the first calendar quarter, the Company expects revenue of $265 million to $270 million. For complete details on Acxion’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

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CheckFree Nears Break-Even in Final Quarter 2003

Atlanta-based CheckFree reported fourth quarter revenue of $149.9 million, an 11% gain over the same period last year. The fourth quarter net loss was $1.9 million, compared to $6.7 million in previous quarter, and $11.2 million one-year ago. The Company reported that its Electronic Commerce unit processed more than 139 million transactions for the quarter, a 10% increase over the previous quarter; delivered 18.5 million electronic bills, an increase of 26% over the previous quarter; and increased its electronic rate by two full percentage points to 78%. For the first calendar quarter, the Company projects revenue in the range of $149 to $154 million. In the fourth quarter, more than 12 million consumers initiated online payments through services offered by CheckFree’s Electronic Commerce division. For complete details on CheckFree’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

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PayPal Up 70%+ Over Year Ago Quarter

eBay reported Wednesday that its PayPal business handled $3.7 billion of gross payment volume during the fourth quarter, a 74% increase over 4Q/02. PayPal produced $132.6 million in transaction fees for 4Q/03, a 78% jump over the year-ago quarter. At the end of the fourth quarter PayPal had 40.3 million accounts, compared to 23.3 million one year ago. During the fourth quarter, PayPal handled 68.2 million payments, an 74% increase over 4Q/02. PayPal captured 52% of eBay’s total $7.1 billion in total sales volume during the quarter. In the third quarter, PayPal accounted for 67% of eBay’s gross merchandise sales. PayPal’s transaction revenue rate was 3.52%, compared to 3.40% one-year ago. The processing expenses rate for the fourth quarter was 1.23%, compared to 1.29% for 4Q/02. PayPal’s transaction loss rate came in at 33 basis points compared to 37 basis points one-year ago. For complete details on eBay/PayPal’s fourth quarter performance visit CardData ([www.carddata.com][1])

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

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NetBank Acquires 1,000 Additional Card Merchants

Atlanta-based NetBank announced that its Financial Technologies subsidiary has changed its name to NetBank Payment Systems, and has signed an agreement to acquire select assets of Southern California-based Electronic Cash Systems. With the addition of the ECS assets, NetBank Payment Systems will have more than 5,000 ATMs deployed across the country processing more than 1.5 million or $72 million worth of transactions per month. NetBank, Inc. operates with a revolutionary business model through a diverse group of complementary financial services businesses that leverage technology for more efficient and cost effective delivery of services.

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IntelliStripe 380 Goes USB

MagTek has released a USB-compatible version of its “IntelliStripe 380” motorized card reader/writer. The new version supports both USB and RS-232 interfaces. The MagTek motorized IntelliStripe 380 is a competitively priced, attractive PC-based unit ideal for card issuers managing a small to moderate issuing flow of loyalty, access or identity cards for lodging, services, commercial, and institutional applications. MagTek has been a world leader in electronic transaction technology, from magnetic stripe card readers and writers, to MICR check readers and scanners, secure PIN issuance and cardholder verification systems.

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Paymentech Launches Dynamic Currency Conversion

Paymentech yesterday announced that it will offer “Dynamic Currency Conversion” at the point of sale and has chosen First Data’s “GlobalChoice” to offer the new “DCC” services. DCC allows foreign consumers to choose to have their payments processed in their home currency, which enables them to “lock in” the exchange rate for the transaction, and to know at the time of purchase the amount of their purchase in their home currency. DCC provides advantages for U.S. businesses catering to international travelers, especially in popular destinations like New York, California and Florida. Paymentech, L.P. processes more payment transactions than any other company in North America – and more than half of all Internet transactions – for retailers accepting U.S. and international payments via traditional point of sale, Internet, catalog and recurring payments.

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OFT Reprimands GE Consumer Finance for Sending Unsolicited Harrods and Debenhams Cards

GE Consumer Finance was censured by the Office of Fair Trading for doing a forced-conversion of store credit cards to other credit cards. According to the OFT, GE converted more than 100,000 Harrod’s and Debenham’s store cards without the cardholder’s knowledge. In October. Marks & Spencer Money was reprimanded by the OFT over the conversion of Marks & Spencer store cards with the new “Marks & Spencer Money &more MasterCard.” Both issuers were found to be in breach of “Section 51 of the Consumer Credit Act 1974” which prohibits the sending of unsolicited credit cards to consumers. The OFT did not take enforcement action and was satisfied that both issuers made adjustments in their disclosures and policies.

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Triton ATMs Certified by EMVCo

MS-based Triton has received “EMV Level II Certification” for its “9100,” “9600,” and “9700” model ATMs. Triton’s success in passing all Level II certification tests means that Triton ATMs will meet the January 1, 2005 deadline for compliance with EMVCo chip card specifications. EMVCo, LLC, was formed in February 1999 by Europay International, MasterCard International and Visa International to manage, maintain and enhance the EMV Integrated Circuit Card Specifications for Payment Systems as technology advances and the implementation of chip card programs become more prevalent. Triton is committed to redefining and leading the market for cash delivery systems. Triton is the largest provider of off-premise ATMs and ATM management software in North America and has more than 95,000 installations in over 17 countries worldwide.

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Waggener Edstrom Expands MasterCard Relationship

Seattle-based Waggener Edstrom Strategic Communications has expanded its relationship with MasterCard International to include MasterCard’s Global Development and Corporate Payment Solutions business units. MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. Waggener Edstrom provides strategic communications to companies that bring new inventions, discoveries and ideas to market.

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Chase Card Earnings Up 25%, Volume Grows 13%

J.P. Morgan Chase reported that operating earnings for its card business increased 25% in the fourth quarter, and that its credit card outstandings hit $52.3 billion in the fourth quarter, a 3% increase over the prior quarter, and a 2% gain over 4Q/02. Charge-offs declined and dollar volume increased for the third consecutive quarter. Operating earnings for the fourth quarter were $171 million, compared to $137 million one-year ago. Charge-offs came in at 5.76%, compared to 5.83% in the previous quarter, and 5.71% one-year ago. Charge volume for 4Q/03, which includes total customer purchases, cash advances and balance transfers, was $23.9 billion, compared to $21.2 billion for 4Q/02, a 13% increase. However, delinquency (30+ days) increased 6 basis points over the third quarter to 4.68%. Delinquency for 4Q/02 was 4.67%. Chase reported that it signed up about one million new accounts in the fourth quarter. The issuer ended the year with 30.8 million gross card accounts and 16.5 million active card accounts. For complete details on Chase’s fourth quarter performance visit CardData (www.carddata.com).

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