Brokerages Split on 2005 Portfolio Sales

ARLINGTON, Va. – Two independent brokerage firms that track the market for credit union credit card portfolios have split slightly this year on how the market performed in 2005. Asset Exchange, the brokerage headquartered in Portland, Oregon, analyzed NCUA’s Call Report data and found that 70 credit unions, five more than in 2004, sold their card portfolios to banks but that the aggregate value of the portfolios sold dropped from $475 million in 2004 to $470 million last year. Brookwood Capital, a card brokerage headquartered in Peterborough, New Hampshire, analyzed the same data and reported that the number of portfolios sold dropped last year, from 67 in 2004 to 65 last year and that the total value of the portfolios sold hit $481 million, up from $459 million in 2004. Brookwood also reported the average size of a credit union card portfolio sold in 2005 was $7.4 million. But even though credit unions continued to outsource their credit card portfolio issuing and management in 2005, NCUA’s data also indicated that credit union card portfolio performance also improved, according to a leading card brokerage’s analysis. Asset Exchange examined NCUA’s 2005 data and found that 2,150 credit unions have card portfolios of over $1 million and that, overall, a smaller percentage of credit union members had their credit union’s credit card in 2005 (18.1%) than in 2004 (18.6%). But the broker’s analysis also found that credit union card portfolios’ value increased by 2.9% in inflation adjusted dollars, from $22.0 billion in 2004 to $23.4 billion in 2005. The percentage of overall credit union assets which those portfolios represent also rose last year, from 4.22% at end of 2004 to 4.31% at the end of 2005. For its part, the Kessler Group, formerly Kessler Financial Services, took credit for the sale of more than half of the card outstandings that were sold in 2005 and claimed to have helped credit unions sell 18 of their portfolios in the fourth quarter of 2005. Long associated primarily with MBNA, Kessler brokered many portfolio sales to Elan in 2005. The firm said it has brokered the sale of more than 130 credit union card portfolios. “This year continues the trend of steady growth for the outsourcing credit card solution in the Credit Union market,” says Steven Fuld, Senior Vice President with Kessler Group.