Bank News

• PR - Unibanco Renews Commitment to Fair Isaac's Fraud Solution
  Fair Isaac Corporation (NYSE: FIC), the leading provider of analytics and decision management technology, today announced that Uniao de Bancos Brasileiros, S.A. (Unibanco) has signed a new, five-year agreement to use Fair Isaac's Falcon(TM) Fraud Manager as its exclusive fraud detection solution. Unibanco will use the company's industry-leading fraud management technology to protect its retail credit, debit and private-label card portfolios.Unibanco, Brazil's third-largest private bank with nearly 20 million customers, has successfully used Falcon Fraud Manager since 1998. The system currently protects more than one billion payment cards worldwide, detecting a wide range of fraud with the highest level of accuracy using sophisticated neural network models and other predictive technologies."The highly competitive banking environment in Brazil required Unibanco to implement enhanced fraud management capabilities that allow future agility in this rapidly growing consumer credit market," said Jorge Luiz Viegas Ramalho, TI-Operations Director at Unibanco."Fair Isaac has been enormously skilled in meeting our specific business needs and providing us with powerful decision management solutions that reduce our overall risk exposure. Using Fair Isaac's enhanced Falcon solution will enable us to mitigate fraud risk across all of our card products and channels and react to emerging fraud trends more quickly without impacting our customer relationships."With a population of 183.5 million, Brazil is the largest consumer credit market in Latin America. Demand for consumer credit has expanded by 115 percent during the period 2003-2006, with credit outstanding estimated to be nearly $110 million at the end of the 2006, according to Euromonitor."This new agreement for our Falcon solution is a strong endorsement for the tremendous success of our partnership with Unibanco," said Helcio Beninatto, managing director of Fair Isaac's Latin America operations. "Through the years, Fair Isaac solutions have delivered significant performance results for the bank. We are gratified that our expertise in analytics and financial services has helped one of Brazil's most important financial institutions become a true leader in the use of critical enterprise decision management solutions in Latin America."Fair Isaac and Unibanco have collaborated closely for many years to help the bank effectively manage risk, control fraud and increase operational efficiencies. In addition to relying on Fair Isaac's Falcon Fraud Manager for fraud protection, Unibanco has been utilizing a customer-centric, enterprise-wide Fair Isaac solution to achieve a 60 percent reduction in loss provisioning during a period of accelerated portfolio growth. This solution integrates Fair Isaac's Capstone Decision Manager software for account origination, Customer Management TRIAD adaptive control system to manage existing customers and Fair Isaac predictive analytics.
• GE Puts Private Label Card Unit on the Block
  General Electric Co. is taking a hard look at the private-label credit card unit of its GE Money division, with thoughts of either selling the unit or partnering with another investor, Jeffrey Immelt, GE chairman, told investors during a conference in New York on Tuesday. The division was the leading store card issuer in 2006 with outstandings of $35.5 billion, charge volume of $63.2 billion, and 50 million active accounts, according to The Nilson Report a newsletter covering the payments industry. GE’s clients include Brooks Brothers and JCPenney, The Wall Street Journal reported. Immelt said that the private label division could be attractive to a buyer or investors seeking scale in a business that has consolidated to just a few major issuers. “It’s going to be a very attractive platform for certain people who want to use this time period to either build franchises in the U.S. or build more scale and leverage their base costs and their credit card business,” said Immelt. “You can use more scale from a marketing standpoint.” GE also issues cobranded cards with retailers that carry either the MasterCard or Visa brand, though that portfolio didn’t appear to be on Immelt’s selling block. There are only a few other large private label issuers, including JPMorgan Chase, HSBC and Citi, that are logical bidders for GE’s division, said David Robertson, Nilson publisher. “But HSBC and Citi are licking their wounds now (due to write offs in the subprime mortgage market.) There’s a finite number of buyers.” Immelt’s announcement comes following an announcement in September by Target Corp. that it is shopping its $7.2 billion credit card division, that includes a cobranded Visa card and a store card (“Target Could Sell $7 Billion Card Portfolio: Report,” Sept. 9). Target issues cards through its Retailers National Bank division. Target is the one of the few large retailers that still issues its own card, with most selling off their card operations to third-party providers like GE to generate cash and to focus on their store sales. The private label business last year generated $92.5 billion in outstandings and $130.1 billion in charge volume from nearly 131 million active accounts, Nilson reported. Citi followed GE with outstandings of $28 billion and charge volume of $25 billion.
• Cap One Card Charge Offs, Late Payments Rise
  Capital One Financial Corp. reported yesterday a net charge-off rate in its U.S. credit card portfolio of 5.34 percent in November, up more than 40 percent from 3.79 percent in November of 2006, and up about 5 percent from a month ago. The card delinquency rate was 4.93 percent in November, up more than 31 percent from 3.75 percent in the same period a year ago, and a rise of about 4 percent from October this year. Cap One’s credit card receivables totaled $50.4 billion at the end of November. It charged off $222,426 while 30-day delinquencies came in at nearly $2.5 million. The charge off rate on its auto loan portfolio was 4.0 percent in November, up nearly 45 percent from November 2006. The 30-day delinquency rate was 7.05 percent, up more than 25 percent from a year ago. The auto loan division charged off $83,213 and reported 30-day delinquencies of nearly $1.7 million. Cap One reported its charge off rate for its entire managed loan portfolio was 3.52 percent in November, a rise of nearly 5 percent from last month, and an increase of nearly 8 percent from November 2006. The 30 day delinquency rate was 3.68 percent, up more than 5 percent from a year ago. The update was in a monthly filing with the U.S. Securities and Exchange Commission.
• U.S. Bancorp Elects Richard Davis Chairman, Announces Dividend Increase
  U.S. Bancorp’s (NYSE:USB) board of directors announced yesterday that Richard K. Davis has been elected as chairman, replacing the retiring Jerry A. Grundhofer. Davis, 49, who will continue as president and chief executive officer of U.S. Bancorp, officially assumes today the additional responsibilities of chairman of the board. Davis, who has more than 31 years of experience in the banking industry, succeeded Grundhofer as chief executive officer of U.S. Bancorp on December 12, 2006. Davis has been president of U.S. Bancorp since October 2004, and has held a variety of senior management positions since joining the company in 1993, including head of consumer and commercial banking from 2003 to 2004, and head of consumer banking from 1993 to 2003. Prior to joining U.S. Bancorp, Davis was executive vice president of Bank of America and of Security Pacific. He earned a bachelor’s degree in economics from California State University Fullerton. Grundhofer, 63, retired today from the board of directors of U.S. Bancorp, and will now assume the title of chairman emeritus. U.S. Bancorp’s board of directors also today approved a 6.25 percent increase in the dividend rate on U.S. Bancorp common stock to $1.70 on an annualized basis, or $0.425 on a quarterly basis. The board declared a quarterly common stock dividend of $0.425 per common share payable on January 15, 2008, to shareholders of record at the close of business on December 31, 2007. U.S. Bancorp, through its predecessor companies, has increased its annual common share dividend rate in each of the past 36 years and will have paid a dividend for 145 consecutive years as of January 15, 2008. Prior to this announced increase, U.S. Bancorp’s dividend on an annualized basis was $1.60, or $0.40 on a quarterly basis. The board of directors has also declared a regular quarterly dividend of $373.27 per share (equivalent to $0.37327 per depositary share) on U.S. Bancorp’s Serie