Card Sales Down, Card Performance Up in 2006, Says Broker AssetExchange; Card Penetration Up Due to Member Increases
PORTLAND, Ore. -- An analysis of NCUA's year-end data from Asset Exchange, a leading broker of credit union card portfolios, indicates that fewer credit unions reported the sales of their credit card portfolios to NCUA in 2006 than in 2005 and the value of the outstanding balances of the portfolios also decreased.
Asset Exchange's analysis showed that approximately 65 credit unions sold their card portfolios in 2006 (23 in the last quarter of the year), down 7% from the 70 that sold their portfolios in 2005. The total value of the portfolios sold was $454 million for 2006 ($125 million in the last quarter), which is down 3% from last year's value of $470 million.
The card broker's analysis also suggested more credit unions were better managing their card portfolios. Card penetration, long stagnant or slightly falling, rose again; total card assets increased by almost 9% to $26.1 billion while the percentage of cards in the total mix of CU assets also increased, from 4.31% for 2005 to 4.63% last year.
The increase in card penetration, long a gradually declining figure, had more to do with overall credit union membership flattening out than with the number of new card accounts increasing dramatically. The card broker reported that the number of card accounts only rose from 11.4 million card accounts as of the end of 2005 to 11.5 million as of the end of 2006.
Brookwood Capital, another card broker that also tracks card data, reported that its analysis indicated that 69 credit unions sold their portfolios in 2006, which is up from the 67 that had been the previous record in 2004.
Tim Kolk, managing partner with the Peterborough, N.H.-based firm, said he had no explanation for the discrepancy except that Asset Exchange and Brookwood might not have used precisely the same time frames for their portfolio calculations and may not have made them at the same time. Since both firms do not collect data for sales of portfolios of outstanding balances of less than $1 million, it is possible that some portfolios may have been counted by one firm and not counted by another.
"We have never sat down and compared the data," Kolk said.
The outstanding balances sold figure would be significantly less, however, if the Allegacy sale had not taken place. At $65 million, it was the largest credit union portfolio sale in over five years, Kolk pointed out.
Kessler Financial Services, another card brokerage that is generally associated with purchases by Elan Financial Services, also agreed with Asset Exchange's numbers and pointed out that it had brokered 46 out of the 65 deals that had been reported for 2006. --email@example.com