GZS & SPARDA-BANKEN

Sparda-Banken has renewed its credit-card processing contract with GZS Gesellschaft für Zahlungssysteme mbH until 2008. The portfolio to be processed by GZS covers the banking group’s entire 370,000 MasterCard/EUROCARD and VISA credit-card base. GZS recently renewed a credit-card processing with Deutsche Bank, its largest domestic processing client.
GZS supports 7.6 million credit cardholders and process over 800 million payment transactions a year.

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VISA Global

VISA International reported that its global volume increased 15.1% last year, approaching US$2.5 trillion. On its peak day last year, December 23rd, VisaNet reached a record authorization rate of over 4,700 messages per second and cleared 91 million transactions valued at US$5.7 billion. VISA’s Asia Pacific, Latin America/Caribbean, and CEMEA regions grew 30.8%, 17.3%, and 38% in sales volume, respectively. VISA volume in the U.S., EU, and Canada, increased 8.1%, 15%, and 9%, respectively. VISA also reported that its debit volume hit US$1.1 trillion, an 18.7% increase over 2001. Usage of VISA’s commercial payment solutions reached US$143 billion, a 29.1% increase over 2001.

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US Airways Processor

US Airways has inked a five and one-half year agreement with Bank of America to process the company’s credit card transactions. The contract becomes effective May 15, upon the termination of its current agreement with National Processing. Last month, the U.S. Bankruptcy Court of the Eastern District of Virginia for Alexandria gave US Airways 45 days to finalize an agreement with a new credit card processor. National Processing has originally given a March 31st deadline for US Airways to emerge from reorganization or face termination. In May 2002, National Processing announced its decision to discontinue processing debit and credit card transactions for all its airline clients. The Company said it will not renew airline contracts when their current terms expire. The contracts currently in effect have various expiration dates extending through November 2005. Bank of America is also the issuer of a co-branded VISA card with US Airways. (CF Library 5/30/02; 2/27/03; 3/19/03)

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March Performance

Charge-offs for March, based on the February period, declined from 7.50% in the previous month to 7.45% in March. The news is good considering that losses tend to artificially rise in the first quarter as consumers pay off holiday charges. Compared to one year ago, charge-offs are up a modest 3 bps. However, the trend may be short-lived as delinquency rates continue to rise. Delinquency (30+ days) for March, based on the February period, increased from 5.65% in the previous month to 5.71%. Late stage delinquencies (60+ days) were up 4 bps in March, according to CardData ([www.carddata.com][1]).

Charge-Off Historical
Mar 02: 7.42% Sep 02: 7.33%
Apr 02: 7.57% Oct 02: 7.40%
May 02: 7.73% Nov 02: 7.46%
Jun 02: 7.45% Dec 02: 7.51%
July 02: 7.21% Jan 03: 7.53%
Aug 02: 7.24% Feb 03: 7.50%

note: based on previous month’s performance

Source: CardData ([www.carddata.com][2])

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

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UAL – US Airways

Bankrupt United Airlines and U.S. Airways, which emerged from bankruptcy this week, have begun a reciprocal award redemption program. The program, which went into effect April 1st, enables United “Mileage Plus” members and US Airways “Dividend Miles” members the benefit of award redemption on either carrier. Members from either program also have the flexibility to use United and/or US Airways flights in any combination for award travel. Bank One issues the United Airlines “Mileage Plus VISA” cards and Bank of America issues the U.S. Airways “Dividend Miles VISA” cards.

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Micro-Portfolios 1Q/03

As with larger portfolios, the contraction in the first quarter is apparent among the smallest bank credit card portfolios. In early reports from micro-issuers for 1Q/03, outstandings declined about 6% in the first three months of 2003. The percentage of active accounts versus gross accounts ranged from 48% to 66% for 1Q/03 among the sampling of smaller issuers, which mirrors the pattern among the nation’s top issuers.

OUTSTANDINGS
ISSUER 1Q/03 4Q/02 CHNG
Clinton Natl Bank (IA) $937,015 $950,738 -1.4%
Cecil County Schools FCU (MD) $857,759 $909,819 -5.7%
Magnolia State Bank (MS) $484,127 $513,549 -5.7%
Monroe County Bank (AL) $352,663 $405,217 -13.0%

Source: CardData ([www.carddata.com][1])

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

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