CardTrak.com - Most Trusted Source of Credit Cards Since 1986

Citigroup
Citigroup reported that profits for its credit card business in North America increased 13% in the third quarter to $819 million. Credit card outstandings for North America increased 3% over 3Q/02 to $117.4 billion, including $6.3 billion in receivables associated with the Home Depot portfolio. However, charge volume dipped slightly as 3Q/03 volume was $62.3 billion compared to $62.4 billion one year ago. Citi's account base at the end of third quarter was 97.7 million accounts, a 10% gain over 3Q/02. Citi's charge-offs decreased from 6.23% in the second quarter to 5.77% for 3Q/03. Delinquency (90+ days) also declined from 1.86% for 2Q/03 to 1.82% for the third quarter 2003.

MBNA
MBNA announced that net income for the third quarter soared to $658.8 million, an increase of 66% compared to the third quarter of 2002, and a gain of 21% over the prior quarter. MBNA also beat analyst projections by 4-cents per share. Managed loans for 3Q/03 were up 10%, and charge volume was up 14%. Total managed loans at the end of the third quarter were $112.8 billion, and charge volume was $47.8 billion. Managed charge-offs were 5.13%, compared to 5.35% in the previous quarter, and 4.84% one year ago. Delinquency on managed loans was 4.48%, compared to 4.46% in 2Q/03, and 4.80% in 3Q/02. During the quarter MBNA added 2.7 million new accounts, compared to 3.0 million in the second quarter. The issuer signed 105 new affinity card deals during the quarter. The issuer also renewed more than 350 affinity group contracts during 3Q/03.

Bank One
Bank One says its credit card profits for the third quarter were off 4% compared to one-year ago, but up 2% over the prior quarter. The issuer blamed the softer profits on margin compression and a higher provision for credit losses. For the third quarter, Bank One posted net income of $285 million for its Card Services unit, compared to $296 million for 3Q/02 and $279 million in the second quarter. Total card revenue and net interest income increased 5% to $2.1 billion and $1.6 billion, respectively. End-of-period managed card loans increased 7% to $74.2 billion, compared to $69.2 billion one year ago. Charge volume increased 8% to $42.8 billion. Net charge-offs increased to 5.30%, compared to 5.21% in the prior quarter, and 5.00% for 3Q/02. The 30-day delinquency rate, decreased to 3.98% from 4.05% in the prior year but increased from 3.95% in the prior quarter. The 90-day delinquency rate was flat at 1.85% for the second and third quarters, but much higher than last year's third quarter rate of 1.68%.

American Express
American Express Travel Related Services posted third quarter net income of $606 million, a 9.7% gain over 3Q/02, but $28 million lower than the second quarter. AmEx reported that marketing, promotion, rewards and cardholder services expenses rose 26% from year-ago levels, primarily reflecting the expansion of card-acquisition programs and cardholder loyalty program participation. AmEx's U.S. gross dollar volume increased nearly 14% and managed card loans increased by nearly 11.5% during the third quarter, compared to one-year ago. Card spending volume contributed to a 13% rise in discount revenue to $2.2 billion. Credit quality improved as charge-offs fell from the previous quarter and the year-ago quarter. However, delinquency (30+ days) rose 10 basis points to 2.8% from the prior quarter, but remain below last year's 3.2% level. Charge-offs declined 70 basis points to 5.00% for the third quarter, compared to one-year ago.

Capital One
Capital One reported that its profits declined for the third consecutive quarter, however, compared to 3Q/02 the issuer's profits are up 6.8%. For the third quarter, Capital One posted net income of $276.3 million, compared to $286.8 million in the second quarter, and $309.1 million in the first quarter of this year. The issuer says its growth in super-prime loans has reduced margins. Also, marketing expenses for the third quarter increased $45.4 million since the second quarter to $316.0 million. One year ago, Capital One spent $185.8 million in marketing expenses. The increased third quarter marketing produced 621,000 net new accounts. The issuer ended the quarter with 46.4 million accounts. During the third quarter, Capital One grew its managed loan portfolio by $6.5 billion to $67.3 billion. The managed charge-off rate declined to 5.44% in the third quarter, from 6.32% in the previous quarter. One year ago charge-offs stood at 4.96%. The managed delinquency rate (30+ days) declined to 4.65% from 4.95% at the end of the previous quarter. One year ago delinquency was 5.31%.

Bank of America
Bank of America says that its card income increased 16% to $794 million. The issuer says consumer credit and debit card purchase volumes increased 14% and 23%, respectively, since 3Q/02. Managed credit card profits were $319 million for the third quarter, a 28% gain over 3Q/02. Total revenue for its managed credit card portfolio was $1.1 billion, a 26% gain over last year. At the end of the third quarter, BofA had $33.6 billion in managed credit card outstandings, a 20% increase the year-ago quarter. Third quarter charge-offs were 5.33%, compared to 5.74% in the prior quarter, and 5.13% one year ago. Managed 30+ day delinquency was 3.84%, compared to 3.99% in the second quarter, and 3.63% for 3Q/02. Managed 90+ day delinquency was 1.76%, compared to 1.80% in the second quarter, and 1.66% for 3Q/02. BofA also reported that its 2.8 million active bill pay users paid $12.7 billion of bills during the quarter.

Sears National Bank
Sears reported that its domestic Credit and Financial Products division posted a 29% increase in operating income while it experienced a slight decline in revenues to $1.3 billion. Since the prior quarter, Sears' average credit card outstandings have declined from $29.4 billion to $29.2 billion, due to the continuing contraction in its private label portfolio. The "Sears Gold MasterCard" increased from $12.6 billion in the second quarter to $13.0 billion for 3Q/03. Since 3Q/02, Sears bank credit card portfolio has grown more than 35%. The "Sears Card" declined from $16.8 billion in 2Q/03 outstandings to $16.2 billion in third quarter outstandings. In the third quarter, net charge-offs rose to 7.55%, compared to 5.55% one year ago. Delinquency also edged up to 7.62%, compared to 7.41% for the second quarter, and 7.24% one year ago. Sears also reported that its 3Q/03 net interest margin increased to 14.10%, compared to 13.25% for the second quarter, but below 3Q/02's 14.75% rate. Sears is in the process of selling its domestic Credit and Financial Products division to Citigroup.

Providian
Providian posted net income for the third quarter of $85.3 million, double its profits for the third quarter of last year. During the quarter, the issuer added approximately 400,000 gross new accounts and ended the quarter with about 10.8 million customer accounts. Providian's managed loans declined to $16.95 billion following the sale of approximately $667 million in loans on August 1st. The issuer says that its net credit losses in the third quarter were better than expected at $607.0 million, resulting in a managed net credit loss rate of 14.37%. The second quarter net credit loss rate was 16.84%. Providian's managed 30+ day delinquency rates at the end of the third quarter were 9.68%, compared to 9.72% at the end of the second quarter.

FleetBoston (#11) agreed to buy Circuit City's (#11) sub-prime VISA and MasterCard portfolio. Under terms of the deal, FleetBoston will pay $1.3 billion for VISA and MasterCard credit card receivables, and related cash reserves, that total about $1.5 billion. In August, Circuit City said that getting out of the bankcards business would enable the company to avoid the large cyclical profit swings that are inherent in finance operations serving primarily non-prime accounts. Circuit City will retain about $1.5 billion in private-label and co-branded VISA credit card outstandings. The deal is expected to close by year-end.

Shortly after the Circuit City acquisition, FleetBoston announced it was merging with Bank of America (#8). The new Bank of America credit card portfolio will have approximately $50.0 billion in outstandings, putting in a close tie with Discover at $50.0 billion and Chase at $50.3 billion. At the end of the third quarter, BofA reported $33.6 billion in managed card loans, while Fleet reported $14.7 billion in managed card outstandings. Fleet's third quarter figures do not include the Circuit City acquisition. BofA has about 23 million credit cardholders and Fleet has 10.5 million. The new BofA will have nearly 5,700 retail banking offices and more than 16,500 ATMs.The company will have 9.8% of the banking deposits in the USA and have the first, second or third largest market shares in 21 of the 29 states in its retail footprint, including significant market shares in 21 of the nation's 30 largest metropolitan areas.

Rush Card
Hip hop music mogul Russell Simmons and his UniRush Financial Services have teamed with a faith-based organization to offer a prepaid VISA card to unbanked Floridians. The Trinity Financial Institution is now offering the "Rush Prepaid VISA Card" to its under-banked and the un-banked members. Simmons launched his card in March as a prepaid payroll card. Last month, he teamed with his wife, Kimora Lee to launch the "Baby Phat Prepaid Rush VISA" card.