The long-cool market for credit union credit card portfolios may flicker to life in 2012, according to a noted card industry analyst.
Robert Hammer, a leading card portfolio consultant and evaluator for more than 20 years and CEO of R.K. Hammer-Card Knowledge Factory, said there are signs of life across all segments of credit card portfolios as card issuers grow more accustomed to the current regulatory regime and the economy improves.
“The most interesting thing about market and deal sentiment now,” noted Hammer, “is that it appears the uptick in deal flow has for the first time in a long time cut across all card segments: prime deals, subprime, private label, and even prepaid card portfolios. In the past, the prime card segment seemed to be the only one, more fairness opinions and valuations being done in that category, and thus more inquiries from CEOs, producing more portfolio sales opportunities. That is changing, widening.
“The economic recovery is improving; issuers’ balance sheets and capital strengthening; lower defaults rates and loss provisions; new marketing; stated buyer interest in doing deals; and rising deal prices, all point to a more active market for card deals in 2012,” Hammer added.
According to Hammer's forecast, 32 so-called prime credit card portfolios, those made up of the highest scores and best-performing accounts, which include credit union card portfolios, will sell this year.
For the past two to three years, sales of CU credit card portfolios have dwindled to a trickle.