Capital One announced this morning the selection of D’Arcy Masius Benton & Bowles as its new integrated communications agency partner. Capital One forecasts an $80-$100 million brand communications budget with DMB&B over the next 12-18 months. Capital One and DMB&B will partner on creative development, media planning and buying, interactive communications and global brand strategy. Direct marketing will continue to be handled by Capital One’s in-house agency, where marketing amounted to $446 million in 1998.Details
CitiGroup reported this morning that core income for credit cards increased 75% to $268 million in the first quarter. Citi says revenues increased 40% as a result of pricing increases and 48% growth in receivables to $69 billion, driven by the UCS acquisition and core business improvement. Credit experience also continued to improve, with net charge-offs in the U.S. bankcard portfolio falling to 4.72%. More details on Citi’s first quarter performance will be available in Tuesday’s CardFlash with full financial details available via CardData ([www.carddata.com]).
American Express’ domination of the small business card market is dwindling according to a new survey released Friday by PSI Global. The research firm found that VISA’s share of the small business card market soared to 20%, compared to an 11% share last year. The ‘1999 PSI Global Commercial Services Research Program’ survey shows that VISA now stands just two points below American Express in the small business commercial card market. The survey also found that MasterCard now has a 13% market share, up from 10% in 1998. The new ‘CSRP’ study, which is based on telephone interviews with 900 companies with sales between $500,000 and $10 million, found that 49% of all small businesses in this category are now using some type of business credit card. In 1998, 37% of these firms used a business credit card. While the number of companies using business credit cards has grown steadily, total card billings have remained relatively unchanged. The average small business spends about $10,000 each year on a business card, typically revolving about $2,000 monthly.Details
Equifax announced Friday afternoon that it has sold its minority ownership in Proceda Tecnologia e Informatica S.A., the technology outsourcing company interest it acquired as part of its card processing initiative in Brazil. MCI Worldcom Inc. is the purchaser. Equifax will record a slight gain on the sale of its financial interest. Equifax acquired 34% ownership in PROCEDA in Sept. 1998 as part of the acquisition of a majority ownership of Unnisa – Solucoes em Meios de Pagamento Ltda., a major provider of full service bankcard and private label card processing. PROCEDA will continue to provide all the data processing services related to UNNISA’s 2.5 million credit and debit cards in Brazil.Details
HNC Software Inc., a leading provider of predictive software solutions to large banks and other financial institutions, has formed a strategic alliance with Open Solutions Inc.) to enhance the product offerings that both companies extend to their markets. HNC also made a minority equity investment in OSI, a leading developer of client/server core data processing solutions for community banks and credit unions.
The companies’ first joint project will be the integration of HNC Financial Solutions’ Falcon Cheque checking account fraud detection software with OSI’s product suite. Falcon Cheque is designed to run in a bank’s check processing center. Using a powerful, neural network-based fraud model, Falcon Cheque can address in-stream, off-line batch, and real-time processing paths and uncovers fraud on deposited checks, as well as on checks written on accounts at that bank.
Douglas Anderson, OSI Chairman and CEO, said, “OSI continues to bring superior services to the mid-size financial institutions. Our alliance with HNC supports this goal, separating us from our competitors, and enabling OSI to offer HNC predictive technology integrated with OSI solutions. Also, as a result of the alliance, we expect our client base to broaden, as the larger financial institutions become exposed to OSI’s technology.”
“OSI’s client/server technology for mid-size banks provides a great platform for enabling HNC’s predictive solutions in a broader market,” said Michael A. Thiemann, HNC Financial Solutions President. “This alliance has great potential for providing substantial benefits to the financial industry.”
OSI, a Glastonbury, Conn.-based provider of banking systems, offers The Complete Banking Solution (TCBS) and The Complete Credit Union Solution (TCCUS), which support all of a financial institution’s core data processing requirements. The company was founded in 1992 by experts in data modeling, software development and design. OSI offers The Complete Banking Solution (TCBS), a WindowsNT(R)-based retail banking system embracing client/server technology and Oracle database technology. TCBS supports deposit and loan account processing, customer information, reporting, back office and federal regulatory compliance requirements. OSI also offers The Complete Credit Union Solution (TCCUS) for credit unions. For more information on OSI, The Complete Banking Solution or The Complete Credit Union Solution contact Michael Nicastro at (860) 652-3158, via fax at (860) 652-3156, or email email@example.com. Visit OSI’s Internet site at [www.opensolutions.com].
About HNC Financial Solutions
HNC Software Financial Solutions, a leader in predictive software for the payment card and consumer lending industries, provides a powerful set of proven, business solution modules that address the mission-critical, customer-lifecycle management needs of financial institutions. Seamless integration of the various solutions on the same decision platform allows a financial institution or financial services firm to manage its customer relationships throughout the customer lifecycle. For more information, contact Patsy Campbell, Director of Marketing, HNC Financial Solutions, 5930 Cornerstone Court West, San Diego, CA 92121, (619) 546-8877.
About HNC Software
Headquartered in San Diego, California, HNC Software Inc. (Nasdaq:HNCS) is one of the world’s leading providers of Predictive Software Solutions for service industries, including financial, retail, insurance, Internet, and telecommunications. HNC’s suite of Predictive Software Solutions can provide real-time insight into customer relationships based on transaction-level data, helping business-to-consumer companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability; optimize store replenishment activities, and detect fraudulent customer transactions. For more information, visit HNC’s web site at [http://www.hnc.com] or contact Jane Leonard, HNC Software Inc., 5930 Cornerstone Court West, San Diego, CA 92121, (619) 799-3880. For the investor relations hotline, call (800) 396-8052.
Citigroup announced Friday that William I. Campbell, Co-Chief Executive Officer of the Global Consumer Group, has decided to retire later this year.
“When I joined Citicorp in 1995, I wanted to help bring the Consumer Group to a new level,” Mr. Campbell said. “The momentum behind our great progress was accelerated by our October merger with Travelers, which enabled us to establish, in one transaction, greater efficiency, broader product diversification and the ability to cross-market products globally through expanded and varied distribution channels. With clear evidence of the success of our merger and confidence that our long-term franchise goals are well embedded in our businesses, I have concluded that this is an opportune time for me to pursue other interests in my life. I know that Bob Lipp and the rest of our team have the ability to continue to bring the Consumer business to new heights of accomplishment.
John S. Reed and Sanford I. Weill, Co-Chief Executive Officers of Citigroup, said, “Bill has played an enormous role in the successful integration of our consumer businesses and has helped to lead the Consumer segment to the record results it is achieving. We understand the reasons behind his decision, and are pleased that he has agreed to remain available on a consulting basis to assure a smooth transition and to help the Consumer Business reach its goals for 1999. He takes this step with our respect and best wishes. At the same time, we know that Bob Lipp, who immediately becomes Chairman and Chief Executive Officer of the Global Consumer Group, will provide solid leadership for us.”
Robert I. Lipp said, “At the time of the merger that created Citigroup, the tremendous potential we had to establish a new model for serving our customer’s financial needs was clear. Bill has been an important part of our efforts both to create this model and to lead it to the financial success it is now achieving. I will miss his day-to-day involvement both personally and professionally.”
Citigroup (NYSE: C), the world’s most global financial services company, provides some 100 million consumers, corporations, governments and institutions in 100 countries with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management. The 1998 merger of Citicorp and Travelers Group brought together such brand names as Citibank, Travelers, Salomon Smith Barney, Commercial Credit and Primerica under Citigroup’s trademark red umbrella. Additional information can be found at: [www.citi.com].
CT-based People’s Bank reported this morning that net credit card charge-offs, as a percent of average managed receivables, stood at 3.97% for the first quarter, compared to 3.85% for the first quarter of last year and 3.71% for the fourth quarter. Meanwhile credit card delinquencies improved to 2.66% of quarter-end managed receivables, compared to 3.35% a year ago and 3.06% at year-end 1998. People’s also reported that managed credit card fees rose 24%. According to CardData (www.carddata.com), at the end of the first quarter 1999, People’s had $3,633,404,606 in card loans; $1,730,588,253 in first quarter volume; 2,767,657 gross accounts; 1,766,538 active accounts; and 3,492,742 cards-in-force.Details
Equifax and Card Services for Credit Unions announce they have extended an agreement for Equifax to provide card processing services for all 1,750 CSCU members. Equifax has processed CSCU card programs continuously since 1989. The new agreement begins October 1, 1999 and continues through September 30, 2004, adding five more years to CSCU’s 10-year relationship with Equifax. Total revenues over the life of the new agreement are estimated at $500 million. Since partnering with Equifax in 1989, CSCU membership has increased from 478 to 1,750 members. Cardholder accounts have increased from 1.3 million in 1989 to 6.9 million in 1999.Details
Hypercom announced Thursday it has acquired the assets and business of JTS ChequeOut Solutions, Inc.. JTS is a provider of card-based, multi-lane financial and marketing systems for US supermarket chains. Hypercom says JTS will become a division of Hypercom and will be based in Rochester, NY. The new division will report to Roger Hitchcock, the VP/GM of Hypercom’s POS Multi-Lane Division. The acquisition is in line with Hypercom’s strategy of entering and establishing a leadership position in the estimated $500 million multi-lane payment terminal and systems market global provider of electronic payment solutions.Details
Early results from CardData’s (www.carddata.com) ‘First Quarter 199 Portfolio Survey’ indicates mid-tier issuers, as a peer group, are regaining strength. NC-based BB&T Financial added more than 28,000 accounts during the first quarter while receivables barely declined. UT-based First Security likewise added about 5,000 accounts with a modest decline in outstandings. OH-based Provident Bancorp. realized a 24,000 account gain with surprising 25% increase in first quarter receivables.
1Q/99 PORTFOLIO STATS
ISSUER OUTSTANDINGS VOLUME ACCOUNTS ACTIVES CARDS
BB&T Financial $373,803,000 $194,592,000 451,057 237,525 526,453
First Security $212,401,020 $122,725,768 287,876 134,869 388,749
Provident Bancorp $206,951,361 $118,294,359 155,032 84,469 172,388
Source: CardData (www.carddata.com)Details
TX-based Twister Communications announced this morning it is giving away one million minutes in free long distance service to nationally launch a 7 cents per-minute rate. Starting today, the first 10,000 visitors to Twister’s special promotion website, www.7cents.com will be able to register to receive 20 minutes free long distance. In addition to flat 7 cents domestic long distance, 7-7-7 customers also get the ‘Twister Talk Travel Cards’, which are billed at 7 cents per minute, but without per call surcharges. The phone card carries a $4.95 per month fee. The long distance and travel calling card is also offered with a ‘Personal 800’ number to eliminate collect calling. With ‘Twister Talk Personal 800’ service, there is a set up fee of $14.95 that is directly billed to your account, however, all calls are just 7 cents per minute. Six months after Twister entered the long distance market six months ago and now generates 30 million phone minutes per month.Details
Starnet Communications International Inc. has announced its wholly owned subsidiary EFS Australia Pty Ltd. has successfully launched its Australian on-line transaction processing facility in association with Westpac Banking Corporation of Australia and Pure-Commerce Pty. Ltd. of Australia.
EFS Australia offers yet another alternative for Starnet to process on-line real time credit card transactions for its subsidiaries and licensees. Since its inception, EFS has provided connections to a variety of banks around the world, and processed hundreds of thousands of transactions for a variety of online merchants. In association with Pure-Commerce Pty. Ltd. and Westpac Banking Corporation, EFS will utilize Starnet’s proprietary STAR-MX technology to process international financial transactions via the Internet with ease and security.
Westpac Banking Corporation, “Australia’s First Bank”, is one of Australia’s oldest financial institutions, originating in 1817, and has global assets of more than A$118 billion. Pure-Commerce Pty. Ltd. acts as a complete support service and processing gateway for electronic commerce in Australia.
Terry Bowering, Vice president, Offshore Operations for Starnet Communications International Inc., states “Australia is one of the world’s leaders in the adoption of computer technology. It has an extremely advanced banking system and Internet infrastructure and is currently a forerunner in many niche industries including Internet Gaming. This event marks another step in Starnet’s plan to expand its global presence.”
Starnet is a fully reporting U.S. (Delaware) corporation, which is currently listed on the National Association of Security Dealers (“NASD”) Over-The-Counter Bulletin Board and commenced trading in September of 1997 under the symbol “SNMM”. Starnet is also listed on the Berlin Stock Exchange (“Berlin”) and is publicly traded on Over-The-Counter market under the symbol “SNM”.
Starnet is an Internet software, technology and service company, which commercializes on-line applications for established markets. For more information, please visit [www.snmm.com].
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products and other risks detailed from time to time in Starnet’s fillings with the Securities & Exchange Commission.