Royal Bank Card Bond

Royal Bank of Canada announced Friday that it has structured an asset-backed commercial paper program that will enable it to sell a $1.1 billion ownership interest in its VISA credit card receivables.

The transaction involves the creation of a special purpose trust, Luna Credit Card Trust, which will hold a $1.1 billion ownership interest in the bank’s credit card receivables. The Trust will fund its purchases of the ownership interest by issuing commercial paper. The commercial paper program is being managed by RBC Dominion Securities, Royal Bank’s investment banking arm. The Dominion Bond Rating Service has given the commercial paper a rating of R-1 (high).

“This transaction is similar to the $1.5 billion credit card securitization we announced last October and reflects our continuing emphasis on the efficient management of the bank’s balance sheet and capital,” noted Suzanne Labarge, executive vice-president of Royal Bank’s Corporate Treasury Group.

Royal Bank of Canada is Canada’s premier global financial services group with leading market shares in personal and business banking, corporate and investment banking and wealth management. As one of North America’s largest financial institutions, Royal Bank and its key subsidiaries Royal Trust, RBC Dominion Securities, RBC Insurance and Royal Bank Action Direct have 55,000 employees who serve 10 million clients through 1,600 branches and offices in 36 countries.


AmEx Financial Change

American Express Company today filed a Form 8-K with the Securities Exchange Commission noting that, as previously reported, it will modify its business unit segment reporting to reflect organizational changes made in last year’s third quarter.

Effective with the issuance of the Company’s first quarter 1998 financial results later this month, the results of the Travelers Cheque Group will be reported in a new segment with American Express Bank. The Travelers Cheque Group had historically been reported as part of the Travel Related Services (TRS) segment. The change is being made in accordance with Statement of Financial Accounting Standards No. 131 which redefines operating segments based on management’s internal reporting structure. As announced in last year’s third quarter, responsibility for the Travelers Cheque unit was moved from TRS to the Chief Executive Officer of American Express Bank. The move was made to better align the Travelers Cheque business with The Bank’s strengths in overseas markets and improve its ability to take advantage of synergies that can be realized from closer cooperation between the two units.

The filing includes selected 1995-1997 segment financial results to reflect the change in reporting of the Travelers Cheque operation. This segment reporting change had no impact on consolidated financial results for those periods.


Diebold Up 15%

Diebold, Incorporated today announced its 1998 first quarter results. In the quarter ended March 31, Diebold reported net income of $26,850,000, or $.39 per share, on revenues of $295,739,000. This compares to first quarter 1997 net income of $23,733,000, or $.34 per share, on revenues of $264,608,000, which represents increases of 15 percent in earnings per share and 12 percent in revenues.

“We are pleased to once again report double digit growth in both revenues and earnings for the quarter,” said Robert W. Mahoney, Diebold chairman and chief executive officer. “We continue to focus on the opportunities that exist in our global markets and concentrate on executing our long-term strategies to capitalize on those opportunities.”

Diebold, Incorporated, headquartered in Canton, Ohio, is a global leader in providing card-based transaction systems, security and service solutions to the financial, education and healthcare industries. Founded in 1859, the company develops, manufactures, sells and services automated teller machines, campus systems, smart card systems, electronic and physical security equipment, automated medication dispensing systems, integrated systems solutions, software and supplies.


Three Months Ended
March 31,
1998 1997
Net Sales
Product $193,130 $171,760
Service 102,609 92,848
Total 295,739 264,608

Cost of Goods 193,604 172,249

Gross Profit 102,135 92,359
Percent of Net Sales 34.5% 34.9%

Operating Expenses
Selling, General and Administrative 49,746 43,553
Research, Development and Engineering 14,930 12,901
Total 64,676 56,454
Percent of Net Sales 21.9% 21.3%

Income Before Taxes 40,993 35,959
Percent of Net Sales 13.9% 13.6%

Taxes on Income 14,143 12,226
Effective Tax Rate 34.5% 34.0%

Net Income $26,850 $23,733
Percent of Sales 9.1% 9.0%

Diluted Average Shares Outstanding 69,647 69,436

Diluted Earnings Per Share $0.39 $0.34


SIMS Hires Sales EVP

SIMS Communications Inc. announced today the appointment of Marvin S. Berger as executive vice president Sales & Marketing.

In making the announcement, SIMS’ president, Mark Bennett, noted that Berger has earned for himself an outstanding track record of achievement in the communications and computer industries.

“We are most pleased that Marv Berger has joined SIMS”, stated Bennett. “His personal attributes, professionalism, and broad experience in communications and transaction processing sales and marketing complements SIMS total dedication toward meeting the product and service expectations of our customers.”

Berger has had a distinguished career with several major corporations including IBM, where he held sales, marketing, and management positions, Data General Corporation, where he served as sales manager for the Northeast Region, and Visage Corporation where he served as vice president of Sales. Berger’s last position was as vice president Sales, Special Accounts, with SmarTalk Telecommunications Inc., a prepaid phone card company. Berger was with SmarTalk from its formation and, in four years, he was instrumental in helping it grow to a billion dollars in capitalization and $100 million in sales.

Berger received a Masters in Business Administration from the Amos Tuck School of Business Administration at Dartmouth College in Hanover, New Hampshire in 1970 where he was designated a Tuck Scholar for scholastic excellence. He also received a Bachelor of Science in Electrical Engineering from Worcester Polytechnic Institute in Massachusetts in 1965.

Berger has served as voluntary chairman of the New Hampshire Muscular Dystrophy Association, as director of the Manchester, New Hampshire Chamber of Commerce, and as a volunteer consultant for the Small Business Administration.

SIMS Communications provides low cost, turnkey, transaction processing solutions to retailers. These solutions include its patented, intelligent, DebitLink POS terminal, custom software and comprehensive network of financial transaction processors including most credit card and ATM networks. Also included are prepaid services including prepaid phone card activations and prepaid cellular transactions.


Microsoft & Integrion LinkUp

Integrion Financial Network and Microsoft Corp. announced plans yesterday to jointly develop a connection between consumers using Microsoft Money personal financial management software and Integrion’s Interactive Financial Services platform.  For the planned fall release of Money 99, the companies will develop server technology that translates Open Financial Exchange messages into GOLD Standard messages.  The solution is scheduled to be available at the end of this year for Integrion banks that offer Money 99 to their consumers.  Going forward, both organizations plan to conform their products to the new converged industry message standard announced last week by the Banking Industry Technology Secretariat.  This initiative expands the existing relationship between Integrion and Microsoft.  Integrion currently supports Money 98 and prior versions of the software on the Visa Interactive-banking platform, which Integrion acquired in August 1997.


Performance Booster

DynaMark, Inc., announced a new on-line marketing and risk analysis service designed specifically for credit card issuers.  The company’s new APEX Customer Management and Analysis Systems, which is available either in a service offering or as an on-site system, contributes to improved portfolio performance by allowing credit card issuers to monitor and respond quickly to changing portfolio dynamics.  The system gives users real-time access to multiple sources of customer, promotion and credit bureau data via on-line business intelligence software.  As a result, portfolio managers who use the APEX system can readily identify opportunities to strengthen profitable customer relationships, focus marketing program strategies, and respond to changing market conditions and/or competitive threats.


AmEx Free Email

American Express announced the full roll-out of AmExMail, a free Internet e-mail service that provides members with a new level of control for managing their personal and business communications.  American Express has been testing AmExMail since November 1997, offering the service via traditional and online marketing channels to select Cardmembers and non-Cardmembers.  The service provides members with a permanent e-mail address that they can access conveniently form virtually any computer connected to the Internet.  The pilot results exceeded Company expectations, especially in customer response rate, indicating the value of AmExMail to both Cardmembers and non-Cardmembers.


FDR & PNC Extend

First Data Resources, Inc. announced a two-year contract extension with Pittsburgh, PA. based PNC Bank Corp. to provide debit card processing services through 2002.  Under the agreement, First Data will continue to provide debit card processing services for PNC’s approximately 1.7 million debit card accounts on file.  Financial terms of the agreement were not disclosed.  PNC Bank has bee a First Data debit card processing client since 1995.


Senior Citizen Sues Citibank

A 79-year-old El Dorado County woman has filed a lawsuit against banking giant Citicorp for demanding payment of a credit-card debt and threatening her with criminal charges after she received bankruptcy protection.

The suit alleges that Citicorp violated the Fair Debt Collection Act, committed extortion and caused the intentional infliction of emotional distress on the plaintiff, Anne K. Warren of Placerville.

“Citicorp threatened this law-abiding senior citizen with a fraud investigation and criminal charges,” said Archibald M. Mull, III, a Sacramento attorney who specializes in consumer fraud. “This was an intentional act to frighten Mrs. Warren into paying off her Citibank MasterCard even though she was protected through the United States Bankruptcy Court.”

Mrs. Warren had used the credit card for more than 17 years. It was issued to her husband, who died in 1981, and was continued to be used and renewed by Mrs. Warren after his death. Mrs. Warren, who receives Social Security and continues to work full-time as a home care provider for minimum wages despite her advanced age in order to make ends meet, sought and received bankruptcy protection in 1996 because she didn’t bring in enough income to pay off her debt. Citicorp continued to seek payment and in January 1998 sent the matter to a collection agency.

The lawsuit also alleges extortion, because Citicorp attempted to obtain money through threats of criminal prosecution. It is asking for actual and punitive damages for Mrs. Warren and restitution of all money obtained by Citicorp as the result of similar alleged unlawful, unfair and fraudulent business practices upon its other credit-card customers who also sought bankruptcy protection.

While Warren’s lawsuit is unique, Mull believes there are many more senior citizens and others whose rights are violated by issuers of credit cards.

“These credit-card companies are using shocking tactics to frighten innocent, law-abiding citizens,” Mull said. “We want to put an end to such tactics through the judicial system.”

The lawsuit was filed in El Dorado County Superior Court.


Gemplus Expands Exec Team

Gemplus today announced that it has named Michael Crosno and Donna Jeker, two highly-experienced technology executives, to its senior management team in Silicon Valley. Mr. Crosno and Ms. Jeker will work together to develop and execute an IT-focused sales and marketing strategy for Gemplus.

Mr. Crosno steps in as executive vice president of sales for North America. He joins Gemplus from Eastman Kodak, where he was general manager and vice president of the $450 million Americas business imaging systems division. Mr. Crosno’s experience also includes executive positions at ViewStar and Computer Associates International.

Donna Jeker, vice president of strategic marketing and alliances for North and Latin America, will oversee strategy, marketing, and global technology partnerships. Ms. Jeker’s professional background includes senior positions at Sybase, Neuron Data, and DataMind.

“We are delighted to have Michael and Donna join our company,” said Dominique Trempont, president of Gemplus Americas and Information Technology Products Group worldwide. “They are world class professionals who clearly understand where smart cards fit in the electronic payment and Information Technology market. They bring sharp execution skills to ensure that Gemplus continues to be the leader in this business.”

About Gemplus

Gemplus () is the world’s leading provider of conventional and smart card-based solutions. Gemplus sells magnetic stripe cards, memory and microprocessor-based smart cards, smart contactless cards, electronic tags and smart objects. The company designs and markets software, development tools and readers. Gemplus also provides consulting, training and personalization services to deliver the industry’s most comprehensive and flexible card-based solutions to its developers, distributors, partners, and customers.

With sales of over US$585 million in 1997, Gemplus employs more than 4,100 people, in ten manufacturing facilities, five R&D centers and 41 sales and marketing offices located in 27 countries around the world. Founded in 1988, Gemplus has successfully implemented portable and secure smart card-based solutions to simplify applications such as public and wireless communications, financial transactions, loyalty, transportation, education, healthcare, identity, access control, pay TV, electronic commerce, Internet security, and information technology.


OFX/GOLD Upgrade

InteliData Technologies Corp. today announced that financial institutions who purchase the Interpose OFX server will be provided a free upgrade to the converged OFX/GOLD standard, which is expected this summer.

InteliData Chairman William F. Gorog applauded the action taken by the leadership of the proponents of the OFX and GOLD standards. “This action taken by the Banking Industry Technology Secretariat (BITS), Integrion, IBM, Microsoft, Intuit and CheckFree, removes one of the last obstacles confronting financial institutions anxious to implement home banking systems.”

Last month InteliData announced that its Interpose OFX server had been fully certified by Microsoft and Home Financial Network to support a full feature set of home banking transactions, including balance inquiry, statement download, bill payment, and customer e-mail. Financial institutions can now install the Interpose OFX server to accommodate current Microsoft Money and Home Financial Network’s Home ATM users and any other customer devices, such as Web TV, which utilize the OFX standard with the assurance that the server will be upgraded to accommodate any changes required by the convergence of the OFX and GOLD standards later this year.

InteliData President and CEO John Backus, commenting on the action, said, “Combining the flexibility of Windows/NT with the power of the IBM mainframes permits banks to begin serving their customers with an inexpensive solution, and capacity can easily be added as customer volume increases. The component architecture allows banks to offer an OFX solution in under 100 days for under $100,000.”

Interpose OFX offers banks a turnkey solution today to support home banking via the Internet, Microsoft Money and HFN’s Home ATM. InteliData’s solution will also support other products that will implement OFX in the near future. Interpose OFX is easy to install and implement at a financial institution since it comes complete with “off-the-shelf” software tools that minimize custom development. The product includes tools to support message management and routing, message translation, integration to legacy information systems, data warehousing, synchronization, logging, and account administration. Independent development of these components could take up to 90 work months.

InteliData, with headquarters in Herndon, Va., is a leading supplier of home banking software with over 20 of the top 100 U.S. financial institutions as customers. The Company’s products include the Interpose Financial Engine, Interpose Payment Warehouse, Interpose OFX, Interpose EBMS, and MoneyClip, the smart card-based Internet security solution.


Recurring Payment Incentive

MasterCard International introduced a merchant incentive program to expand card usage and acceptance for recurring payment transactions in the U.S. MasterCard’s new Service Industries Inventive Program targets the insurance, utility, telecommunications, and cable television industries  the four merchant categories that constitute more that 90 percent of the $500 billion recurring payment category.  Currently 98 percent of recurring payments within these industries are paid by checks  representing an enormous growth opportunity for credit cards.  To assist members in enlisting merchant acceptance of recurring payments by credit card, MasterCard is offering a special incentive interchange rate for all participating merchants in the insurance, utility, telecom and cable industries who begin a Recurring Payment by MasterCard Program. MasterCard is also adopting operational enhancement and has designed an extensive sales and marketing program called “Repeat Pay”.