Fleet 1Q/03

FleetBoston reported yesterday that credit card outstandings dipped below $15 billion in the first quarter, a 2.5% decline over the first quarter of 2002. Since the first of this year Fleet’s outstandings have decline nearly $1.4 billion due to portfolio sales, lower balance transfers, a decline in cash advances, and other normal seasonal factors. Delinquency and charge-offs climbed in the first quarter mainly due to the denominator effect. For the first quarter, the delinquency rate was 4.37% compared to 3.97% one year ago. Delinquency at the end of the fourth quarter was 4.12%. Charge-offs for the first quarter hit 6.13% compared 5.42% one year ago. Charge-offs for the fourth quarter were 5.16%. Fleet also reported that first quarter credit card revenues declined 9% to $156 million. For complete details on FleetBoston’s first quarter results visit CardData ([www.carddata.com][1]).

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

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ABSA FUELMASTER

ABSA Bank has joined OTI’s “FuelMaster Express” program for private motorists. The deal
gives BP and Exel access to a customer base of over 400,000 motorists. Customers issued the “FuelMaster Express” key fobs will be able to use it at BP and Exel stations on an interoperable basis. OTI’s fuel management system, branded by BP as “FuelMaster,” monitors and expedites the fueling and payment process for fleets. “FuelMaster Express,” which was originally launched in conjunction with Standard Bank, is aimed at private motorists, enabling them to pay for gasoline at the pump.

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MOBILE RECHARGE

Citibank Indonesia has launched the Euronet “Mobile Recharge” service with payment connections for the four major mobile operators. Consumers are able to replenish prepaid airtime directly to their prepaid mobile phone through Satelindo, Telkomsel and Excelcomindo. IM3 is expected to launch by June. Satelindo has 2.4 million customers; Telkomsel has 5.0 million customers; Excelcomindo has 1.6 million customers; and, IM3 has 400,000 customers. By selecting Euronet’s “Mobile Recharge” service, Citibank has enabled approximately 1.4 million active cardholders to perform recharge transactions from their mobile phones.

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Bank One 1Q/03

Bank One this morning reported that its Card Services unit produced net income of $248 million for the first quarter, a 4% gain over 1Q/02. The nation’s third largest bank credit card issuer says that margin compression associated with continued competitive pricing necessary to retain and attract customers contributed to the softer growth in profits. First quarter outstandings were $72.8 billion, a 12% gain over the year-ago quarter. Charge volume was up 13% to $38.3 billion. Net charge-offs, as a percentage of average managed loans, declined to 5.29% for 1Q/03 from 5.69% for 1Q/02. The 30-day delinquency ratio was 4.08%, compared to 4.27% in the prior year. During the first quarter, Bank One opened 1,037,000 new accounts, ending the quarter with 50,978,000 cards-in-force. Paymentech reported an increase in total revenue of 13% to $134 million, resulting from a 23% increase in bank card volume and a 30% increase in total transactions, driven primarily by the purchase of the Scotia Bank merchant acquirer business. For complete details on Bank One’s first quarter results visit CardData ([www.carddata.com][1]).

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

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JCB & BANGKOK BANK

JCB International Bangkok Bank Public Company have signed a licensing
agreement for merchant acquiring and
servicing, including sales processing. With this agreement the bank’s
approximately 50,000 new merchants will begin phased
acceptance of the JCB credit card. Bangkok Bank has a 40% share of the
credit card market in Thailand. JCBI entered into a merchant servicing
agreement with the Siam Commercial Bank Public Co., Ltd. in 1989 and
issuing of JCB cards by the same company began in 1990. AEON Thana Sinsap
began issuing operations under license in 2000.

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GM & Le Mans

GM announced yesterday that “The GM MasterCard” will become the official credit card of the “American Le Mans Series” for 2003. In addition to the official card status, “The GM Card” will be an associate sponsor of Corvette Racing in 2003. Under the terms of the agreement, highly visible GM Card decals will outfit two Corvette race cars, show cars, team transporters, team uniforms, crew team uniforms and fire suits. Earlier this month, General Motors signed an endorsement agreement with PGA golfer J.J. Henry whereby he will carry a bag branded by “The GM Card” at all remaining 2003 PGA Tour events, and make a number of personal appearances on behalf of the co-branded card. As of January 2003, there were 6.9 million GM cardholders. (CF Library 4/3/03; 4/8/03)

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War Woes

U.S. credit card losses could go much higher if the economy slides back. Standard & Poor’s says the Iraq war has consumers and their lenders nervous and, in the near term, the war could send oil prices up while further terror attacks on the U.S. could damage consumer confidence. According to a new S&P report, consumer spending has recovered from its post-Sept. 11, 2001 drop, but employment is down sharply and the only real driver for the economy is federal spending. The economy has lost two million jobs since early 2001, which should also inhibit consumer spending. March may remain the monthly peak because of the concentration of losses, but charge-offs will remain above 7% in early 2003. Losses will then gradually slide back below 7% says S&P.

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