Mastercard and Visa buoyed by surge in profits
THE WORLD’S largest credit card firms yesterday reported bumper profits as consumers put more of their spending on cards.
Visa, the world’s largest credit card firm saw profit surge 47 per cent in the second quarter, while closest rival Mastercard saw a 21 per cent rise in profit as spending on credit and debit cards rose.
Visa, which reported after the close of trading last night, said net income in the first quarter was $1.29bn, or $1.91 a share, compared with $811m, or $1.23 a share, a year earlier. Adjusted earnings per share, which exclude one-time items, were $1.60, beating analyst expectations.
The firm increased its 2012 profit forecast, saying it expects annual earnings-per-share growth in the “high teens to low twenties,” up from just the “high teens.”
Meanwhile, Mastercard, the world’s second-largest credit and debit card network, reported net income of $682m, or $5.36 a share, compared with $562m, or $4.29 a share, a year earlier. MasterCard net revenue, adjusted for an acquisition, grew faster than expenses, rising 16 per cent while operating expenses increased nine per cent. Card payments outside the United States grew 20.6 per cent, based on local currencies, compared with 14 per cent growth in the United States.
Mastercard, however, warned such gains were less likely in 2012 because of the strength of the business in late 2011, and doubts about consumer confidence.