Asian-Americans 2001

The U.S. Asian-American population is approaching 12 million and, as a consumer group, has emerged as a highly attractive advertising target for financial services, including credit cards. According to a new research report released yesterday, 32% of Asians have a household income over $75,000, compared to 23% of total Americans, and most carry an American Express card. The Interep report also found Asians enjoy the highest family median income, $51,205, of all racial/ethnic groups, including non-Hispanic whites. More than four out of ten hold a bachelor’s degree, compared to 26% for all U.S. adults over age 25, and they are 40% more likely to work in professional/managerial roles than the average U.S. adult. Interep says the U.S. Asian population remains highly concentrated, with almost half in the top 5 Asian metropolitan areas. While nationally they comprise 4% of the population, some states such as California and Hawaii have a substantially higher proportion of Asian residents. On a market basis, Asian-Americans represent 17% of the San Jose metro, 11% of the San Francisco metro and roughly 5% in Los Angeles, Washington D.C. and Seattle. Because of these large Asian-American pockets, Interep says the most efficient way to target Asian consumers for financial services, including credit cards, is often through localized media, such as spot radio.



TEMENOS, a global vendor of integrated banking software for banks and
financial institutions, announced its results for the quarter ended June
30, 2001, the first results following the recent successful initial public
offering on the SWX Swiss Exchange. Revenues for the quarter were US$39.2
million up 68% compared to the prior year, bringing the revenue for the
twelve months ended June 30, 2001 to US$125.2 million up 80% compared to
prior year. When adjusted for the impact of non-recurring items, EPS for
the year were US$0.36 per diluted share compared to US$0.15 per diluted
share for prior year. This is based on an average number of diluted shares
outstanding during the year of 50,947,889 (qtr:46,089,905). As a result of
the strength of its TEMENOS GLOBUS™ (GLOBUS) product, TEMENOS has produced
a very strong performance.

“In a business world where negative announcements have become commonplace,
it is our pleasure to announce that our results for the quarter to June 30,
2001 exceed expectations. Revenues, profits and client signings are all up.
More importantly, during the quarter, our backlog showed significant
improvement. To produce positive results in a consistent manner in the
current environment and to sustain this performance, you need to
differentiate yourself. TEMENOS differentiates itself by offering a
compelling value system and business philosophy that, I believe positions
it for leadership in the future” says George Koukis, Chairman and CEO.


Earnings per share

During the quarter ended June 30, 2001, the company earned US$0.09 per
diluted share, compared to US$0.06 per diluted share for the same period
last year, an increase of 50%. For the 12 months ended June 30, 2001, the
company earned US$0.20 per diluted share compared to US$0.15 for the
previous year. Earnings for the 12 months include one-off financing costs
incurred in relation to the company’s buy-out of financial investors which
took place in November 2000, amounting to US$8.1 million or US$0.16 per
diluted share, while the corresponding amount for earnings in the quarter
amounted to US$3.6 million or US$0.08 per diluted share. Adjusted EPS for
the quarter were therefore US$0.17 compared to US$0.06 for the same period
last year while adjusted EPS for the 12 months period end June 30, 2001,
were US$0.36 compared to US$0.15 for prior year.


Revenues for the quarter were at US$39.2 million, up 68% compared to the
same period last year, bringing the 12 month revenue to US$125.2 million
and growth to 80%. Licensing revenue grew by 72% for the quarter in line
with the 12 month growth of 74%, while revenue from services grew by 60%
for the quarter and 92% for the 12 month period. The growth in the
company’s revenue is being driven by both new accounts and the roll out of
GLOBUS to multiple sites internationally by existing customers. The revenue
for the quarter was characterised by strong sales of additional
GLOBUS modules and additional users to existing clients.
Operating profit

Operating profit grew by 86% for the quarter to US$8.7 million up from US$
4.7 million for the same period last year. Operating profit for the 12
month period grew by 110% to US$22.1 million, up from US$10.5 million for
the prior year.

Operating margins for the quarter were 22.1%, compared to 20.0% for the
same period last year. Operating margins for the 12 month period was
17.7%, compared to 15.1% for the prior year.


During the quarter the company signed significant new licences and client
support and service agreements. New client wins included Merrill Lynch
Japan and Bank Julius Baer New York. As a result the company increased its
backlog of initial licence fees from US$50.0 million as of March, 2001 to
US$55.2 million as of June 30, 2001.

Employee numbers grew by 134 in the quarter just ended to 1,074, compared
to 597 as of June 30, 2000. The increase occurred across all areas of the
company with particular emphasis in Consultancy Services, R&D, and Sales.
In the quarter we benefited from increased cost efficiencies, with G&A
growing at 4% compared to the same period last year and representing 11.9%
of our revenues for the 12 month period down from 15.0% of revenues for the
prior year.

This has allowed us to continue to invest heavily in product development,
with total R&D spending amounting to 19.2% of revenues for the twelve month
period up from 15.3% for the prior year. We have delivered in excess of
50-man years of new functionality into the G12 release of GLOBUS. The
increase in our development capacity will allow us to deliver significant
additional functionality into our product range over the next year.
Furthermore, our efforts to adapt GLOBUS to run on multiple operating
platforms and databases, in which our IBM relationship has been
instrumental, has seen us deliver:

· GLOBUS running on the IBM Z Series (S/390) with DB2

· GLOBUS running on jBASE in three banks

· GLOBUS running on Oracle at a major London based bank.

Our IBM I series (AS 400) release of the system is expected to available
during the quarter ending December 2001 as planned.

Our efforts to increase the depth and breadth of our sales team continued
according to plan with the addition of 12 new sales personnel in the
quarter ended June 30, 2001. Consistent with our strategy the majority of
these additions were in Europe and the US.

Our presence in the US is expanding, with our total US staff now totaling
80 people at the end of June compared to 48 at March 31, 2001. Our
business in the US is growing as planned.

Note regarding the financial year end
Prior to the incorporation of our group’s new holding company, TEMENOS
Group AG, in June 2001, our financial year ended on June 30 of each year.
The financial year end of TEMENOS Group AG ends on December 31 and, as a
result, it will compile its first consolidated financial statements, which
will be subject to an independent audit, as of and for the year ending
December 31, 2001.


TEMENOS is a global leader in providing financial institutions with
integrated banking systems that increase productivity, profitability, and
allow them to respond to changing market conditions. The company’s
solutions, TEMENOS GLOBUS, are utilised in a variety of segments including
retail and wholesale banking as well as for treasury and accounting
functions. TEMENOS has 24 offices in 19 countries and over 270 installed
client bases. The company had revenues of US$125.2 million for the 12 month
period ended June 30, 2001. In June 2001 TEMENOS became a public company,
quoted on the SWX Swiss Stock Exchange (TEMN).


U.S. Hispanics 2001

A research report issued this week found that 14.3% of urban Hispanic adults, 18 to 34, have annual household incomes of $50,000 or more, and that these same young Hispanics are graduating from college in much greater numbers than their preceding generations. The Media Audit report also found that of all Hispanics 67.5% have checking accounts and 57.9% use ATMs. According to the survey, U.S. Hispanics lose ground, in both affluence and education as the age group gets older. For example only 4.6% of Hispanics age 50 or older have annual household incomes of $50,000 or more, while the percentage among the general adult population is 11.6%. The Media Audit says the relationship between education, income and occupation stands out in its survey, and dispels any thought that the increasing affluence among young Hispanics is solely attributable to longer hours worked or multiple income households. The report concludes that U.S. Hispanics don’t read the front-page section of newspapers as regularly as the general population (35.8% vs. 51.4%) but they come closer with the sports section (24.8% vs. 28.7%). They are more inclined to read the classified ad section (12% vs.10%). They watch sporting events on television and they watch soccer and boxing a lot more than the general adult population. They read more direct mail advertising than the general population and they listen to radio during the week almost as much as the general population.


Account Aggregation

Account aggregation services are moving forward as OH-based National City introduced ‘My Sites’ this week. Earlier this year Wells Fargo launched ‘Wells OneLook’. The National City ‘My Sites’ service allows users to consolidate all of their accounts on one website, including financial accounts such as banking, credit card, mortgage, investment, and retirement accounts. It also allows travel reward balances, e-mail, news, and shopping accounts to be organized on the same site. The new service is available to everyone, customers and prospective customers of National City. In addition to account aggregation, National City’s website also offers online banking and bill payment for personal and business customers, loan applications, checking and savings account applications, free online courses through National City’s Learning Center, unbiased insurance information, and customizable information and news. The National City My Sites program was developed by Yodlee Inc. (CF LIBRARY 3/7/01)


Drexler 2Q/01

Laser card manufacturer Drexler Technology reported second calendar quarter net income was $628,000 and revenues of $3,955,000 compared with $5,171,000 for last year’s quarter. Drexler sold approximately 1,050,000 LaserCard optical memory cards and 100 read/write drives during the quarter compared with approximately 1,100,000 optical memory cards and 480 read/write drives for last year’s first quarter. Last month, the Company announced order for about $4.5 million worth of optical memory cards. For complete details on Drexler’s latest quarterly results visit CardData ([][1]).




MasterCard International, leader of innovations in the payments industry, announced the launch of the MasterCard Generation X Program in Latin America. The Generation X Program is a powerful new card program designed for consumer needs in the new Millennium. It is a chip-based payment instrument providing the benefits of multiapplication technology paired with a cool design and colorful look.

The MasterCard Generation X Program will provide Latin America’s cardholders with the high-quality services of a MasterCard Gold® card and is equipped with a fresh assortment of new features to facilitate purchasing whether in the physical or virtual world. Cardholders can also pre-select and personalize their cards by choosing from a variety of translucent colors and innovative new card designs.

“As the leaders in the implementation of new services and technologies in Latin America, MasterCard is proud to present the MasterCard Generation X Program- another break-through card program that will revolutionize the industry and empower young people with the tools they need to make safe and quick purchases, anywhere and at anytime,” said Jean Rozwadowski, President of MasterCard International for Latin America and the Caribbean Region.

The MasterCard Generation X Program can easily be upgraded making it the most advanced MasterCard payment system of its kind. It can also offer both credit and debit card applications on the same card, and may provide additional security against unauthorized use of the card via the consumer’s PIN.

Internet ID software and the available chip reader connected to the cardholder’s computer will provide the ability to access and store information and personalize each consumer’s smart card with all their favorite sites, logins, and passwords. Internet ID also allows one-click access to MasterCard accounts, previously stored websites and stored home and e-mail addresses. All the information stored on the chip is protected by a user-defined personal identification number (PIN).

MasterCard has a long tradition of leadership in card innovations. The launch of the MasterCard Generation X Program will add to this tradition which includes the industry’s first gold card program (1981), the first use of the laser hologram as an antifraud device (1983), the first bankcard with a tamper-resistant signature panel (1989), the world’s first truly global online debit program, Maestro® (1991), the first to implement a virtual private network design, delivering faster response time and lower costs (1996), the world’s first migration from traditional credit cards to multiapplication chip cards using the MULTOS™ operating system, with MYCAL Card Co. of Japan (1999), and the industry’s first to establish a U.S. rule of no liability for the consumer from the unauthorized use of payment cards (2000).

The MasterCard Gold card features provided with the MasterCard Generation X Program include:

– MasterDelivery™: Provides cardholders with a personal address in the United States for delivery of mail, packages, catalogs, and magazines. Includes, three addresses in the US — one for postal mail (PO Box), one street address, and one virtual (email) address; daily forwarding; access to a toll-free telephone number to order 24 hours a day; plus subscriptions at discounted rates to over 200 of the most popular U.S. magazines.

– MasterAssist™: Available on international-use cards when cardholders are more than 160 kilometers from their city of residence. Provides emergency medical and legal referrals, transfer of advance of bail, transmission of urgent messages, tracing and redirection of lost luggage.

– MasterTravel™ Insurance: Provides cardholders with accidental death or dismemberment when traveling by land, air, or sea on a licensed common carrier (Cardholders must have purchased the ticket for such travel using their MasterCard Generation X Program).

– MasterRental™: Provides cardholders access to car rentals within the U.S. and Canada. In order to activate coverage, the cardholder must decline the CDW/LDW insurance offered by the car rental agency and pay the full amount of the rental with their MasterCard Generation X Program.

– MasterCard Global Service™: Provides worldwide assistance with any MasterCard Generation X Program- related need, 24 hours a day, 365 day a year, including: Lost and Stolen Report, Emergency Card Replacement, Emergency Cash Advance, MasterCard®/Maestro®/Cirrus® ATM Network locations, access to MasterCard account information by transferring or referring cardholders to their issuing banks.

The MasterCard Generation X Program is accepted in all 21 million merchant locations and more than 600,000 ATMs that bear the MasterCard brand worldwide.

Applicants will soon be able to obtain more information on the MasterCard website regarding this program, exclusive promotions, and the member financial institutions in Latin America that will offer this new card in each country.

To download images of the MasterCard Generation X Program, as well as additional MasterCard programs, please visit the MasterCard website at .

MasterCard International has the most comprehensive portfolio of payment brands in the world. More than 1.7 billion MasterCard®, Cirrus® and Maestro® logos are present on credit, charge and debit cards in circulation today. An association comprised of more than 20,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is the leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. MasterCard’s award-winning Priceless® advertising campaign is now seen in 81 countries and in more than 36 languages, giving the MasterCard brand reach and scope unrivaled by any competitor in the industry. With more than 21 million acceptance locations, no card is accepted in more places and by more merchants than the MasterCard Card. In 2000, gross dollar volume exceeded US$857 billion. MasterCard can be reached through its World Wide Web site at .


Certegy Contract

MacDill Federal Credit Union, based in Tampa, Florida, has selected Certegy Card Services, Inc, formerly Equifax Card Services, Inc. to process its 20,000 credit card accounts. “Our members depend on us to provide prompt, accurate financial services,” said credit union executive vice president E. C. Williams. “We have used another card processor for the last several years, but we believe that Certegy is better positioned to help us meet our members’ needs. Certegy is where we want to be, strategically, over the long term.”

Certegy Card Services, a subsidiary of Certegy Inc. is the nation’s largest card processor for credit unions and independent banks, providing card processing services and marketing services for more than 5,000 clients in the United States. Certegy also provides high quality card processing services to clients internationally in the United Kingdom, Brazil, Chile and Australia. Clients in 30 countries around the world use Certegy card processing software.

Williams cites Certegy’s superior back-office support, along with the ability to have a Certegy business consultant provide personalized portfolio development assistance, as important Certegy advantages. “We are focused on attracting even more of our members to MacDill’s card program. We plan to achieve significant program growth, and Certegy is the only processor that can give us the strategic support we need to realize our growth goals-while maintaining excellent service to members,” he says.

“We are delighted to welcome MacDill Federal Credit Union. We will provide them with customized service and the best card processing value in the business,” says Vince Pavese, senior vice president and general manager, Certegy Card Services ­ North America.

Certegy Inc. (CEY: NYSE) provides credit, debit and merchant card processing, e-banking services, check risk management and check cashing services to financial institutions and merchants worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, Canada, the U.K., Ireland, France, Chile, Brazil, Australia and New Zealand. As a proven global payment services provider, Certegy enables transaction certainty, brings customers and commerce together and provides business results through leading technology. Certegy employs about 5,800 associates in 9 countries and had $779 million in revenue in 2000.


ECHO 2Q/01

Card processor Electronic Clearing House reported net income of $282,000 for its third fiscal quarter ending June 30, a decrease of 12.1% compared to net income of $321,000 for the same period last year. Revenue for the quarter was $7.8 million, a decrease of 3.3% as compared to $8 million for the same period last year. Total processing and transaction revenues for this fiscal quarter increased 15.5% to $7.5 million, from $6.5 million in the third fiscal quarter 2000. The increase was attributable to a 128% increase in check-related revenue and a 4.8% increase in bank card and transaction revenue. Terminal sales decreased 87.1% to $183,000 for this fiscal quarter, down from $1.4 million in the third fiscal quarter 2000. This decrease was primarily due to the delivery of approximately 3,100 terminals to U-Haul during the same quarter in 2000. For complete details on ECHO’s latest quarterly results visit CardData ([][1]).



AmEx Cheque Prez

American Express announced the appointment of Barbara Fraser to the position of president, Travelers Cheque Group Worldwide, based in New York City. In this role, Ms. Fraser will have overall management responsibility for the 110-year-old global business, one of the Company?s oldest and best-known enterprises. Last year, American Express Travelers Cheque sales totaled $24.6 billion worldwide.Ms. Fraser has had a successful career in both the consumer goods and financial services industries at leading global companies, bringing broad business experience to her new role with American Express.Ms. Fraser began her career at Procter & Gamble where, over many years, she earned a reputation for delivering strong business growth and developing people. She held marketing and general manager assignments in Canada across all major product categories, including paper, laundry, and cleaning and beauty care. During her last eight years with the company, she was vice president and general manager of Paper Products, and then Beauty Care Products for Canada, leading large organizations and exceeding profit forecasts for seven of the eight years.In 1995, Ms. Fraser decided to enter the financial services sector, joining Citigroup as head of Marketing and Strategic Planning – Investment Products and Distribution for Citibank Global. Ms. Fraser went on to hold a variety of senior positions including chairman and CEO for Citicorp Investment Services and Citicorp Insurance Group, U.S., and managing director – International Investments, Citibank Global.Awards recognizing her business success include:·Citibank Consumer Bank, Special Recognition Award – 1998 ·Academy of Women Achievers, YWCA of the City of New York – 1997 ·American Marketing Association – 1990 Ms. Fraser graduated from the Richard Ivey School of Business, University of Western Ontario in London, Canada, and earned her Series 7 and 24 securities licenses in New York.Ms. Fraser lives in Wilton, Connecticut with her husband and two daughters.Ms. Fraser replaces Susan Kinder, who is retiring from American Express.American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.


Leveling Off

Credit card charge-offs for card-backed bonds of U.S. banks dipped during June as bankruptcy filings slowed. This is good news as charge-offs typically decline during the summer months. According to Standard & Poor’s ‘Credit Card Quality Index’, charge-offs declined by 50 basis points to 6.4% in June among $350 billion in receivables held in trusts of publicly rated credit card-backed securities. Although bankruptcy filings are running higher this year compared with 2000, the rate of filings has slowed down from the reported levels in March and April following the passage of the bankruptcy reform in Congress. More than one-half of the trusts that make up the S&P indexes experienced declines in charge-offs in June. The largest improvements came from Citibank, Citibank/Universal and Providian. Citibank’s losses dropped 215 bps to 3.86%. Universal and Providian also reported a decline of approximately 200 bps over last month’s figures.

Performance month: June 99 June 00 Apr 01 May 01 June 01
Yield: 19.1% 19.4 19.8 20.1 19.0
Charge-offs: 5.9% 5.4 6.6 6.9 6.4
Delinquencies: 4.4% 4.1 4.9 4.9 4.9
Payment rate: 16.4% 16.6 15.5 16.2 16.0
Source: Standard & Poor’s


Concur Expense

Concur Technologies, Inc., the market leader of Corporate Expense Management solutions, announced that Pfizer, Inc., a leading research-based, global pharmaceutical company, has expanded its license of Concur Expense to include more than 85,000 worldwide employees. The expanded license builds on the successful rollout of Concur Expense to Pfizer’s U.S.-based employees. Concur Expense, the world’s leading Web-based T&E expense management solution, allows companies to focus on their core competencies and provides rapid return on investment. Concur’s low risk, high reward Corporate Expense Management solutions reduce operational costs and increase business efficiencies, maximizing a business’ limited resources and bottom-line results.

“Companies are wise to look at corporate expenses as a way to cut costs and increase efficiencies in a slowing economy,” said Phil Dunphy, senior manager, global travel for Pfizer. “We deployed all US employees on Concur Expense, and based on the success of that project, we chose to expand our license with Concur for worldwide deployment. Pfizer will achieve significant T&E savings as a result of our worldwide deployment of Concur Expense.”

“Pfizer is at the forefront of companies who have recognized the importance of reducing corporate expenses in the slowing economy,” said Steve Singh, chairman, president, and chief executive officer for Concur. “Pfizer’s selection of our market-leading expense management solution for worldwide deployment is a tremendous validation for our ability to deliver global deployments that achieve rapid return on investment. Our unmatched experience in deploying tens of thousands to hundreds of thousands of employees in large corporations, like Pfizer, is what makes Concur uniquely qualified to meet Pfizer’s worldwide expense management needs.”

Concur Expense automates each step of the T&E expense management process — from expense report preparation and approval to policy compliance, data analysis, and reimbursement. With Concur Expense, companies gain new control over their T&E expense management process. Travelers prepare expense reports faster and more accurately, aided by the direct prepopulation of expense data from their corporate charge cards. Expense reports are automatically routed to managers, who can more efficiently approve expense reports on-line and receive immediate notification of non-compliant entries. Accounting departments are more productive because expense reports are delivered on-line and automatically link to financial and payroll systems, eliminating the need to re-key expense data. Easily accessible expense data allows the company to analyze spending trends and negotiate better supplier rates for additional savings.

About Pfizer, Inc.

Pfizer, Inc. is a research-based, global pharmaceutical company. The company discovers and develops innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. Pfizer has three business segments: health care, animal health, and consumer health care. Its products are available in more than 150 countries. For more information about Pfizer, go to .

About Concur Technologies

Concur Technologies, Inc. is the market leader of Corporate Expense Management solutions that automate costly and inefficient business processes, allowing companies to better leverage their most limited resources: time, money, knowledge, and energy. Meeting the needs of businesses of all sizes, Concur’s solutions include travel and entertainment expense management, employee requests for vendor payments, and time tracking and reporting, and can be delivered through license and Application Service Provider (ASP) models. Today, over 800 companies, including AT&T, Citigroup, Daimler-Chrysler, DuPont, First Union, and Pfizer, have licensed over 2.2 million employees to use Concur’s market-leading solutions to reduce costs, and increase productivity and access to data about internal business processes. Delivering on its commitment to excellence and meeting the needs of its customers across the globe, Concur leverages its strategic alliances with more than 50 world-class organizations such as ADP, American Express, Exodus, KPMG Consulting, Inc., Microsoft, and Microsoft Great Plains Business Solutions, and has successfully deployed its solution to more than 1.4 million employees worldwide. Concur also continues to expand its international market leadership with more than 50 companies deployed outside North America. More information is available via the Internet at .


Bush & Reform


Dear Mr. Chairman:

The Administration understands that conferees will soon begin to discuss ways to reconcile the House and Senate versions of H.R. 333, the Bankruptcy Reform Act. As an agreement on this bill develops, your consideration of the Administration’s views would be appreciated.

The Administration supports the overall goal of the bankruptcy reform legislation. The common sense reforms in these bills will curb many of the abuses of the current bankruptcy laws. However, the Administration strongly opposes the Senate-passed language regarding the homestead exemption and strongly urges the conferees to return to the bipartisan compromise language that was adopted by the last Congress.

Also, as you know, the Administration opposes Section 1310 of the House bill (which was deleted from the Senate version of the bill) because it has the potential to undercut the rule of law as it applies across international borders, with serious consequences for U.S. interests. The Administration looks forward to working with the conferees to resolve these and any other outstanding issues and secure passage of bankruptcy reform legislation.

Thank you for your consideration.


Mitchell E. Daniels, Jr. Director