MBNA Delivers Another 20%+ Quarter

MBNA reported that net income for the second quarter rose 21% to $660.3 million driven by improving credit quality and growth in fee income. Managed loans for 2Q/04 were up 7%, and charge volume was up 15%. Total managed loans at the end of the second quarter were $118.2 billion, and charge volume was $52.0 billion, including $18.4 billion in cash advances. Managed charge-offs decreased slightly to 4.95% compared to 4.99% in the previous quarter, and 5.35% one year ago. Delinquency on managed loans dropped to 4.08%, compared to 4.27% in 1Q/04, and 4.46% in 2Q/03. During the quarter MBNA added 2.5 million new accounts. MBNA indicated future growth drivers will be its international card business, the launch of its American Express-branded credit card in the U.S., and its expansion into professional practice financing and insurance premium financing. For complete details on MBNA’s second quarter results visit CardData ([www.carddata.com][1]).

MBNA TRACK RECORD
Profits Loans
2Q/03: $543.3 MM $110.5 B
3Q/03: $658.8 MM $112.8 B
4Q/03: $703.5 MM $118.5 B
1Q/04: $519.7 MM $117.6 B
2Q/04: $660.3 MM $118.2 B
Source: CardData (www.carddata.com)

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

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CMB DEBIT CARDS

China Merchants Bank has teamed with MasterCard to launch two debit cards, one targeted at high-net worth customers with more than RMB500,000 on deposit. The new “Platinum Sunflower MasterCard” debit card offers VIP boarding at any airport in the world through “Priority Pass”, among other benefits. The “Gold Allionene MasterCard Debit Card” is for CMB customers with more than RMB50,000 on deposit. The “Gold” version allows various saving programs and multiple currency transactions. Both cards offer “Emergency Cash”, “Card
Canceling/Replacement,” “ATM Direction,” and “Medical Warranty.”
CMB has more than 30 branch offices across 31 mainland cities.

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ADS Profits Double as Revenues Climb 20%

Dallas-based Alliance Data Systems reported that its net income doubled as revenues climbed 20% during the second quarter, compared to one-year ago. Second quarter revenue rose to $300.5 million, compared to $251.0 million for 2Q/03. Net income for 2Q/04 was $28.0 million, compared to $14.1 million for the second quarter of 2003. Transaction Services revenue, mostly from private label and utility services businesses increased 13% to $170.6 million. Credit Services revenue increased 24% to $122.0 million driven by private label credit sales and portfolio growth that grew at a rate in the mid-to-high teens. Marketing Services revenue increased 19% to $84.2 million thanks to solid growth in the “AIR MILES” program. ADS says it expects to outperform its previous guidance for 2004. Specifically, the Company is increasing its 2004 full-year cash earnings per share estimate to $1.44 – $1.48. For complete details on Alliance Data Systems’ second quarter performance visit CardData ([www.carddata.com][1]).

ADS REVENUE SNAPSHOT
2Q/03: $251.0 million
3Q/03: $255.7 million
4Q/03: $298.3 million
1Q/04: $312.5 million
2Q/04: $300.5 million
Source: CardData (www.carddata.com)

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

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Arthur Blank Offers RFID-Enabled Cards

Arthur Blank & Co. is supplying RFID-enabled cards for one of the first loyalty and stored transaction RFID systems for the retail and services industries. The new RFID solution, based on the SynapseT web-enabled framework for rapid deployment of real-time transaction processing, will include RFID cards from Arthur Blank & Co., a leader in card marketing solutions. With RFID-embedded plastic cards, the new platform created by IBSS will offer one of the first RFID retail applications storing a customer’s service transactions and loyalty data on a single card. Arthur Blank & Co., Inc. specializes in all facets of custom printed plastic cards. IBSS is the creator of SynapseT, a groundbreaking software technology. SynapseT is a complete framework and methodology used to create, implement and manage a wide variety of dynamic, distributed, networked and real-time enterprise applications, quickly and efficiently.

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Diebold ATM Revenues Up 10% in Q2

Diebold reported that its financial self-service, or ATM unit, posted revenue growth of 10.9% and 9.5% on a fixed exchange rate basis, during the second quarter. Total revenue for the quarter was $552.0 million, up 14.8% and 13.7% on a fixed exchange rate basis. Diebold posted second quarter net income of $43.7 million. During the quarter, Diebold has “Opteva” ATM orders in excess of $80 million including a $16.1 million order from Brazil and orders from two banks in China and one bank in India totaling $11.5 million. Diebold says it expects third quarter revenue to increase 8% to 11% on a fixed exchange rate basis. Financial self-service revenue are expected to grow by 12% to 14% on a fixed exchange rate basis. For complete details on Diebold’s second quarter performance visit CardData ([www.carddata.com][1]).

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

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Fiserv Revenues Up 30%+ in Q2

Fiserv reported second quarter processing and services revenues of $855.9 million, a 33% increase over 2Q/03. Total revenues for 2Q/04 were up 31% to $946.0 million. Net income for the quarter was $95.0 million, a 21% gain over 2Q/03. During the second quarter Fiserv signed contracts with Caja Popular Mexicana, Mexico?s largest credit union; Sovereign Bank, based in Wyomissing, PA; and Chicago-based Liberty Bank for Savings. For complete details on Fiserv’s second quarter performance visit CardData ([www.carddata.com][1]).

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

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Burger King Opts for Omni 3750 Terminals

Burger King has selected “VeriFone Omni 3750” payment terminals for all its company-owned locations and is supporting a program that offers the same solution to franchisees systemwide. The VeriFone terminals accommodate both dial-up and Internet-based communications, allowing franchisees to migrate to faster Internet transactions at their option. The Omni 3750 accommodates a wide range of value-added applications, including gift cards and stored value, which will provide BURGER KING(R) franchisees with greater options to implement customer loyalty and promotional campaigns. VeriFone is leading the industry in the delivery of solutions that add value to the point of sale, resulting in improved merchant retention and the generation of new sources of revenue for its partners and customers. The BURGER KING(R) system operates more than 11,220 restaurants in all 50 states and in 60 countries and territories around the world.

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22MM Prepaid Debit Cards in 2004

A new study by The PELORUS Group projects that more than 22 million prepaid debit cards will be issued this year. The popularity of stored value is not limited to banks and credit card issuers. The report notes that the enormous success of the Starbucks Card has prompted many merchants to leap onto the stored value bandwagon. The study projects that in 2004 400 million convenience cards will be sold to consumers who don’t wish to wait in line to pay for a cup of coffee or a sandwich.

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SpeedPass Offers a RaceCase to Users

ExxonMobil is now offering new and existing “Speedpass” customers an opportunity to get a “Ryan Newman #12 Nextel Cup” race car “Speedpass RaceCase” that fits over its standard “Speedpass” key tag device. New or existing customers must register for the offer at www.speedpass.com and make a minimum of four qualifying purchases between July 1 and Sept. 30, 2004. ExxonMobil is a major associate sponsor of the Penske Racing #12 Dodge race car driven by Ryan Newman.

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Staples Renews Certegy Check Contract

Staples has renewed a multi-year agreement for check risk management services from Certegy. Staples is the world’s largest office products retailer, with approximately 1,600 office superstores. Certegy provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to over 6,500 financial institutions, 117,000 retailers and 100 million consumers worldwide.

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Corillian 2Q/04 Revenues Up 8%

OR-based Corillian reported second quarter revenues of $12.4 million, an 8% increase over the year-ago quarter. Net income for the second quarter was $2.3 million, resulting in diluted earnings per share of $0.06, beating the consensus analyst estimate by $0.01. This compares to net income of $1.8 million in the second quarter of 2003, which resulted in diluted earnings per share of $0.05. Corillian is the top provider of online banking solutions to leading financial institutions.

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Cap One U.S. Cards Level Off; Drops Jobs

Capital One’s second quarter U.S. card profits soared by 40% year-over-year, but came in slightly lower sequentially, as U.S. card outstandings plateaued. The issuer also announced it is cutting 1,400 call center jobs, mostly in Tampa. For the second quarter, COF posted net income for U.S. cards of $384.1 million, compared to $386.8 million in the first quarter, and $274.2 million one-year ago. The managed delinquency rate (30+ days) for U.S. credit cards was 3.95% for the second quarter, compared to 3.99% for 1Q/04, and 5.42% for the second quarter of 2003. The net charge-off rate for U.S. credit cards was 5.10% for the second quarter, compared to 5.41% for the first quarter, and 7.63% one-year ago. The overall managed revenue margin declined to 12.53% in the second quarter from 13.38% in the previous quarter, and 14.85% in the second quarter of 2003. Capital One says the decline is reflective of its decision to focus less on US credit cards, diversifying into lower-loss assets. At the end of the second quarter Cap One had $45.2 billion in U.S. card loans, compared to $45.3 billion in the first quarter. COF’s global managed loan portfolio grew by $1.6 billion to $73.4 billion in 2Q/04. Meanwhile, Capital One confirmed Wednesday it is dropping 1,100 positions at its Tampa facility and approximately 160 positions in Dallas and 120 positions in Richmond, Virginia. For complete details on Capital One’s second quarter performance visit CardData ([www.carddata.com][1]).

COF U.S. CARD NET INCOME
2Q/03: $274.2 million
3Q/03: $276.2 million
4Q/03: $322.7 million
1Q/04: $386.8 million
2Q/04: $384.1 million
Source: CardData (www.carddata.com)

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

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