The Nilson Report

Issue 1146 | Jan 2019

FEATURED COMPANIES

Companies featured in this issue include:

Purchase Volume Worldwide on General Purpose Cards 2017 vs. 2027

Mergers & Acquisitions in Merchant Acquiring/Processing in 2018

Discover Card U.S. 2018

Income at Top U.S. Credit Card Issuers—Company Net vs. Card Net

American Express 2018

Market Shares of Purchase Volume on Global General Purpose Cards

Top 10 Visa/Mastercard Acquirers Worldwide

Mergers & Acquisitions in Merchant Acquiring/Processing in 2018

There were 49 merger and acquisition deals in merchant acquiring and pro-cessing in 18 countries in 2018. The four largest are shown here. The table on page 7 shows all 49 deals.

1. 1. Verifone, United States
Francisco/BC, $3.40 billion
2. 2. Six Payment Services, Switzerland
Worldline, $2.75 billion
3. 3. iZettle, Sweden
PayPal, $2.20 billion
4. 4. Priority Holdings, United States
MI Acquisitions, $1.00 billion

Full access to the Mergers & Acquisitions in Merchant Acquiring/Processing in 2018 results is available when you subscribe to The Nilson Report.

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POSTED JAN 31, 2019 | PRINT

Profits at Top U.S. Credit Card Issuers

Please note: Only subscribers can access the charts included with this article.

The eight U.S. credit card issuers shown in the graphic on page 9 collectively earned $24.94 billion in card profits (pretax net income) in 2018, up 14.2% from $21.85 billion for this same group in 2017. These issuers set aside a combined $28.00 billion at year-end for anticipated card loan losses. This was down 0.3% or $76 million from 2017.

American Express’s Global Consumer Services and Global Commercial Services Groups had 2018 pretax net income of $6.61 billion, up 1.9% versus 2017. Provisions for losses for these groups combined grew 21.5% to $3.33 billion. 

JPMorgan Chase’s card business had card income of $4.99 billion, up 12.5% from $4.43 billion in 2017. Its allowance for credit card loan losses increased 6.1% to $5.18 billion. 

Bank of America’s U.S. card business had pretax net income of $4.22 billion in 2018, up 9.4% from 2017. Its U.S. credit card allocation of the allowance for credit losses increased 6.8% to $3.60 billion. 

Capital One’s Domestic Card subsegment’s pretax net income from continuing operations was up 43.5% to $3.89 billion. Provisions for credit losses declined by 19.5% to $4.65 billion. 

Synchrony Financial’s pretax net income for all of its segments combined grew 9.6% in 2018 to $3.64 billion. Provisions for loan losses grew 4.7% to $5.55 billion. 

Discover Financial Services’ Direct Banking segment, which includes credit cards, student loans, personal loans, home equity loans, checking and savings accounts, and certificates of deposit, had pretax net income of $3.45 billion, up 1.6%. Its allowance for credit card loan losses increased 17.7% to $2.53 billion. 

Citigroup’s North America Citi-Branded Cards and Citi Retail Services businesses had after-tax net income from continuing operations of $2.78 billion, up 24.8%. Net credit losses plus credit reserve build dropped 1.9% to $5.41 billion.

U.S. Bancorp Payment Services, which includes consumer and commercial (small business, corporate, government, purchasing) cards, consumer lines of credit, and merchant processing, had pretax income of $1.98 billion, up 3.7%. Provisions for loan losses slipped 0.1% to $1.08 billion.

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