CardData 4Q/02

More evidence has emerged that 2002 was a very sluggish year for growth in credit card outstandings and dollar volume. Based on a sampling of top issuers and mid-level issuers, outstandings grew 5.4% last year while dollar volume edged up 3.2%. However, profits continue to be strong due to the lower cost-of-funds and improving credit quality. First National Bank of Nebraska and BB&T posted solid gains while Household and FleetBoston reported modest portfolio growth, according to CardData’s 4Q/02 portfolio data. Earlier this week, Citigroup reported a 6% increase in outstandings for 2002, and Wells Fargo posted a 6.7% gain in outstandings last year. For complete details on the latest 4Q/02 information on the nation’s top issuers visit CardData ([www.carddata.com][1]).

4Q/02 OUT 4Q/01 OUT CHNG 4Q/02 VOL 4Q/01 VOL CHNG
Household $16,984,702,000 $16,101,954,000 +5.5% $10,087,783,000 $ 9,631,188,000 +4.7%
FleetBoston $16,151,000,000 $15,644,000,000 +3.2% $ 6,818,000,000 $ 6,799,000,000 +0.3%
First Natl NE $ 4,303,320,013 $ 3,822,869,273 +12.6% $ 1,680,080,000 $ 1,520,043,000 +10.5%
BB&T $ 880,272,000 $ 780,479,000 +12.8% $ 517,253,746 $ 462,954,000 +11.7%
SouthTrust $ 349,563,531 $ 324,093,455 +7.9% $ 166,605,418 $ 156,829,237 +6.2%
TOTAL $38,668,165,000 $36,673,395,000 +5.4% $19,269,722,000 $18,670,014,000 +3.2%
Source: CardData (www.carddata.com)

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

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KEB Suspends Cash Advances as LG Card Bidding is Underway

VISA International European Union has inked a contract to offer Fair,
Isaac’s next-generation fraud management technology to all VISA members in
26 European countries. VISA EU will offer Fair, Isaac’s
“Falcon Fraud Manager” and “Fraud Predictor with Merchant Profiles”
solutions. “Falcon” and “Fraud Predictor” offers a leap in fraud detection
through the Falcon patented neural network technology and cardholder
account information, leveraging “Fraud Predictor’s” merchant-specific data
and patented profiling technology to better identify multiple types of
payment card fraud. The VISA EU solution will be deployed utilizing the
newly released “Falcon Fraud Manager Version 5” technology architecture,
which now provides a thin-client Graphical User Interface. VISA EU members
manage more than 208 million payment cardholders.

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Metris Downsizes

Sub-prime credit card specialist Metris Companies/Direct Merchants Credit Card Bank confirmed Wednesday it is reducing its workforce by approximately 180 employees, including 25% of the company’s senior management team. The cutbacks follow by one month the firing of Ronald Zebeck, former chairman and CEO of Metris. The new CEO and chairman David Wesselink said the staff reductions will save the company approximately $20.8 million annually. However, Metris will take a 1Q/03 charge of $4.9 million. More than half of the positions being eliminated are at the company’s Minnetonka headquarters. Zebeck was sacked last month as charge-offs continued to soar in the face of the collapse of the sub-prime market. For the third quarter, Metris reported a net loss of $1.3 million following a second quarter loss of $36.4 million. The managed net charge-off rate was 15.1% for the third quarter, compared to 10.7% for 3Q/01. The company will release its fourth quarter earnings next Wednesday, January 29. Metris’ stock closed yesterday at $1.75 per share, down 9%. One year ago, Metris was trading around $28 per share. For complete details on Metris’ latest financials visit CardData ([www.carddata.com][1]). (CF Library 12/16/02)

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

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Tupperware Representatives to have Mobile Card Services via CreditPipe

Bank of Queensland Limited and EDS have selected Fiserv to provide a new
core banking system. The multi-million-dollar agreement is part of BOQ’s
10-year services outsourcing arrangement with EDS that includes
transforming the bank’s IT systems. The decision followed an extensive
assessment process involving a review of the bank’s operations and testing
of the Fiserv solution by a combined Bank of Queensland-EDS-Fiserv team.
Services will be provided through the Fiserv CBS Worldwide business unit.
The Fiserv solution for Bank of Queensland includes “International
Comprehensive Banking System” for core retail banking and Alliant Branch
Teller for teller and branch functions.

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Concord & Cyota

Concord EFS has selected Cyota’s “SecureSuite” platform to provide “MasterCard SecureCode” and “Verified by VISA” to its 6,200 financial institution clients. MasterCard SecureCode, which utilizes MasterCard’s Universal Cardholder Authentication Field (UCAF(TM)), and Verified by Visa are the new authentication initiatives designed to provide Internet shoppers with a virtual receipt to sign at the point of purchase, thus reducing online fraud.

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No Takers for the LG Card Portfolio as LOI Deadline Passes

Metropolitan Bank and Trust Company and New Zealand Banking Group Limited signed a MOU to establish a credit card joint venture in the Philippines. Under terms of the deal, ANZ will acquire a stake in Metrobank Card Corporation. Details of the joint venture should be completed by mid-year. The joint venture will combine Metrobank’s nationwide and international branch network and exclusive access to its extensive customer base with ANZ’s technology and card expertise. The Metrobank Card Company was established in 1985 and has total assets of approximately AUD65 million. It has a base of around 250,000 cards on issue. ANZ is Australia’s leading credit card issuer with 3.8 million cards on issue.

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QUICKWAVE LAUNCHED

Aix-en-Provence-based Inside Contactless and FreedomPay have launched a
cashless loyalty program. “QuickWave” is contactless smart card that is
smaller than a credit card and can be conveniently
fixed on any key chain. Inside’s “PicoPass” chip combines proximity and
long-range operations on the same card. One of the largest U.S. banks
interested in the project has launched a pilot in Charlotte, North
Carolina, with a few dozen downtown restaurants and shops located near its
headquarters.

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Standard Chartered Bank and ICICI Bank Launch VISA Mini Cards

Starbucks Coffee Japan has selected First Data’s “ValueLink” service to assist in the development and implementation of the “Starbucks Card” program in the coffee company’s 400 Japanese stores. The agreement marks the first “ValueLink” stored value program launch in Japan. The Starbucks Japan card program mirrors Starbucks one-year old U.S. program. Starbucks Japan’s fully-integrated system will allow consumers to make purchases and reload funds on existing cards at any of the company’s locations throughout the country. Starbucks Japan will offer non-denominated cards that allow purchasers to select the yen amount they wish to load on a card. In addition, Starbucks Japan will pursue a bulk order program for its business customers who desire the cards for gift giving and incentive programs.

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MasterCard & Perseus

MasterCard has selected Perseus Development Corporation, a leader in web-based survey software and research services, as its enterprise software solution for implementing a survey research system. MasterCard has purchased corporate licenses from Perseus for 2,200 employees to use SurveySolutions Enterprise. The first uses of the software have been for market research and customer feedback. Member financial institutions will be using it in order to view pertinent results and data from market research surveys conducted to obtain customer feedback on banks’ products and services.

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ClearCommerce Engine 5.1

ClearCommerce Corporation, the leading provider of risk management and payment processing software for online retail, announced the availability of ClearCommerce Engine 5.1, which includes a first-of-its-kind automated order Review Assistant, expanded support for Visa’s Verified by Visa and MasterCard SecureCode payer authentication, and a new payment interface to Wells Fargo. Merchants will now be able to automatically verify that the name on the card matches the credit card number, a task in the past that required manual intervention to place a phone call to the card issuer. Another significant enhancement to the ClearCommerce arsenal of risk management technologies is support for the multiple card association’s payer authentication approaches, including both Verified by Visa and SecureCode from MasterCard.

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FleetBoston 4Q/02

FleetBoston reported that its credit card profits for the fourth quarter were up 28% compared to the third quarter, and up 22% compared to 4Q/01. Global credit card outstandings at year-end 2002 were $16,332,000,000, a 3.9% increase over EOY 2001. Net income (after-tax) for the fourth quarter was $86 million compared to $58 million for 3Q/02. Net income (after-tax) for 2002 was $232 million compared to $190 million for 3Q/02. On a managed basis, the credit card net charge-off ratio was 5.16% for the fourth quarter, compared to 5.25% for the third quarter, and 5.38% for the fourth quarter of 2001. The 30+ day delinquency rate was 4.12% for 4Q/02, up 29 basis points from 3Q/02 and up 7 basis points from 4Q/01. For complete details on FleetBoston’s 4Q/02 performance, plus performance from past quarters, visit CardData ([www.carddata.com][1]). (CF Library 1/16/02)

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

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Global Payments Expands into Europe with the Acquisition MUZO

VISA Asia Pacific reported that consumer spending on VISA cards peaked on December 23rd at US$579 million from 9.8 million transactions that day, a 29% increase over December 2001. Worldwide, VISA cardholders spent an average of US$4.3 billion on their debit and credit cards each day during December 2002, a 17% increase over the comparable period a year earlier. The busiest single day in the history of VISA transaction processing was on 12/23/02 when global volume reached US$5.7 billion. VisaNet logged a record processing speed of 4,704 transactions per second on that day. VISA also noted that electronic commerce transactions using VISA grew 77% on volume globally for the month of December. During the four quarters ended September 30, 2002, US$606 billion was spent in Asia Pacific using VISA cards, an increase of 35% over the previous year.

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