Citi U.S. Card Profits Sinks 60% as Losses Mount

Citigroup reported that 4Q/07 profits for its U.S. Cards unit declined 60% year-on-year to $398 million due to increased credit costs and litigation expenses. For the fourth quarter Citi reported a 36% increase in U.S. credit card losses of $595 million compared to $399 million in prior quarter. U.S. Credit card loss reserves were boosted by $493 million for 4Q/07 compared to $134 million for 3Q/07. U.S. card revenues for the quarter were flat at $3.6 billion. Bank credit card outstandings for the U.S. were up 4% to $116.4 billion compared to one-year ago. Private label card outstandings increased 6% to $34.4 billion. Purchase volume for the fourth quarter rose 8% to $87.8 billion. Citi’s account base at the end of the fourth quarter dipped 3% year-on-year to 149.1 million accounts, but up 2.7 million accounts from 3Q/07. Citi’s charge-offs for bankcard and private label cards rose to 5.11% for 4Q/07, compared to 4.53% in the prior quarter and 4.35% one-year ago. Overall delinquency (90+ days) increased to 1.76% from 1.59% for 3Q/07 to 1.62% for the fourth quarter 2006. For complete details on Citigroup’s 4Q/07 performance, visit CardData ([www.carddata.com][1]).

CITIGROUP
U.S. Credit Card Net Income
3Q/06: $1085 million
4Q/06: $1001 million
1Q/07: $ 897 million
2Q/07: $ 726 million
3Q/07: $ 852 million
4Q/07: $ 398 million
Source: CardData (www.carddata.com)

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

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MasterCard Tags Spots with Credit & Debit Cards

MasterCard is launching a new round of “Priceless” TV ads that feature both credit cards and debit cards at the end of each spot. The new commercials, which began airing yesterday, show the MasterCard logo flipping to reveal the two payment forms. This is the first time in 10-year history of the “Priceless” campaign that credit and debit cards were featured together. The new tag appears on three new breaking this week including “Catch,” “Dinner Out,” and “Milk.” Creative for the campaign is handled by McCann Erickson/New York.

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TIETOENATOR CARD SUITE

Societe Generale’s Rusfinance Bank has deployed TietoEnator’s
“Card Suite” solution to ensure consumer crediting and credit card
efficiency. Additionally, the solution will allow the bank to expand
geographically, subsequently increasing customer proposition
volume, and will afford customers greater convenience for account
access. TietoEnator provides solutions for credit card issuing,
acquiring and processing amidst a competitive financial market.
The solutions provider refines its client offering with the help of
16,000 experts across 30 countries while Rusfinance Bank, a wholly
owned subsidiary of the Societe Generale group, has 8000
commercial partners, nearly 1 million customers throughout Russia and
employs over 8000 staff.

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Intermec PC to Use Apriva’s POS Suite

Apriva has signed a deal to provide its “Secure POS Suite” on Intermec’s “CN3 Mobile Computer”. Apriva completed Class A certification of the CN3 Mobile Computer using the Apriva Secure POS Suite running on the device. Apriva’s Class A certification allows Apriva to provide a choice of Level 1, direct merchant support, or Level 2, ISO support, for the product. The Class A certification verifies that Apriva has fully reviewed and tested the solution and its usability on multiple processing partner platforms. Intermec develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Apriva is a wireless solution provider for Point of Sale solutions.

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TRANSUNION & D&B PSAPL

TransUnion has acquired an equity stake in D&B Predictive Sciences
and Analytics Private Limited (D&B PSAPL) for undislosed terms. With
this acquisition, TransUnion will provide throughout Asia-Pacific
decisioning
services and IT services for the development of global generic and custom
model development. This is in addition to TransUnion’s contributions to
the development and maintenance of “CIBIL”, India’s first credit reporting
company and first generic scoring model. TransUnion provides consumer
reporting with the gathering, analyzing and delivering of information and
employs over 4,000 in more than 30 countries while Dun & Bradstreet
Predictive Sciences & Analytics Private Limited (D&B PSAPL) is a risk
management, predictive modeling & analytics technology solutions provider.

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CPSB & ZHEJIANG

China Postal Savings Bank has opened a branch in Zhejiang
province, the 20th of provinces in which the bank’s services are now
available. In terms of deposits, CPSB is China’s 5th largest commercial
bank and has been approved by the China Banking Regulatory
Commission for the establishment of 34 branches and more than
20,000 sub-branches. Furthermore, CPSB has registered deposits of
over 1.7 trillion yuan.

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FGB PLATINUM CARD

First Gulf Bank (FGB) has extended its partnership network to upgrade
its Platinum-card offering. The network enhancement now provides
Platinum customers with enhanced benefits including fuel cash back,
reward redemptions at malls and redemptions at UAE entertainment
centers. Also thanks to the network enhancement, FGB Platinum can
provide customers with discounts at Dubai Creek Golf & Yacht Club,
the Emirates Golf Club, Jebel Ali Golf Resort & Spa and the Abu Dhabi
Golf Club by Sheraton, in addition to 2,400 golf clubs around the
world. The extension of the FGB Platinum Card network compliments
the worldwide acceptance of the Platinum Cards, which are currently
accepted at over 28 million establishments in 210 countries.

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LIVE MORE CREDIT CARD

In honor of Lent, The Methodist Church has introduced its “Buy Less:
Live More Credit Card” to encourage customers to spend less. With the
new card, consumers are reminded not to buy unnecessary goods and
services, leading to a subsequent increase in carbon offsetting and a
decrease in consumerism. Designed to fit in the user’s wallet, the “Buy
Less: Live More Credit Card” is to be placed in front of other credit
cards as a reminder for this cause, rather than as a contributor against it,
and cannot be used for purchases of any kind. Experts responsible for the
card design say the new solution will allow users to reconsider priorities
and weigh the differences between their wants and needs.

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Incentives/Training Drive Agent Card Sales

Even though the vast majority of all portfolio sale deals last year included an agent credit card program going forward, the performance of the agent relationship is dependent on how well trained and aggressive the agents are. A new analysis reveals that “weak performers” that offer no card sales incentives for the retail branch sales staff produce less than 72 accounts per year per branch while “Best in Class” performers generate more than 144 accounts per year per branch. Seasoned agent bank/credit union specialist R.K. Hammer also found that a branch turning in the bottom tier of performance generally promoted other retail products over credit cards. “Medium Performers” were characterized by 84 to 96 new accounts per year per branch; some incentives for branch personnel, but distribution often discretionary by the branch manager; better reporting down to the employee level, and continuous emphasis on card sales. The “Best in Class” peer group offered a wide variety of cash, gift, and trip incentives; excellent monthly reporting; continuous training and retraining, not only on its own products, but competitors as well; had a major focus on aggressive activation of new accounts.

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GLOBAL POWERS OF RETAIL

According to the new Deloitte Touche Tohmatsu report, the “2008 Global
Powers of Retail”, Chinese and Russian retailers have made the top 250
largest retailers in the world for the first time. Compiled in
conjunction with
STORES magazine, the report’s findings show that among these retailers,
China’s Bailian Group ranked 101 on the list while Russia’s X5 Retail Group
N.V. was ranked 191. Wal-Mart Stores, Inc., however, remained the
world’s largest retailer with the Carrefour Group coming in at a distant
second
place. Furthermore, the overall total sales for all 250 retailers rose
to $3.25
trillion in fiscal 2006, up 8% from the year prior, with an average net
profit
of 3.6 %. Deloitte provides services and advice in over 140 countries,
through
over 150,000 advisors around the world, to over 80% of the world’s
largest companies.

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ViVOtech Intros the ViVOpay 5000m System

NFC specialist ViVOtech has introduced a new payment system providing a single point of acceptance for both advanced contactless and legacy mag-stripe payment technologies. The new “ViVOpay 5000m” offers extra features for retailers adopting emerging mobile commerce and promotion applications based on NFC mobile phone technologies. The “ViVOpay 5000m” LCD screen lets merchants display transaction amount and customized messages for promotions and incentives. The new contactless payment reader can also be easily adapted to extend new technology to existing POS and ECR systems. ViVOtech also announced that The Paradies Shops has selected ViVOtech contactless payment terminals for their over 500 retail stores in over 60 airports and hotels across the U.S. and Canada.

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