We told you it was coming…
So, today we got this:
Marketwatch: Citigroup said that it lost $1.4 billion in the third quarter from credit card securitizations and that it expects such losses will continue, possibly reaching record levels in 2009.
The result compared to a gain of $169 million from credit card securitizations in the year-earlier period.
“Credit card losses may continue to rise well into 2009, and it is possible that the company’s loss rates may exceed their historical peaks,” the banking giant said in its filing with the Securities and Exchange Commission late Friday.
And there’s been this:
Bloomberg: …American Express said third-quarter profit from continuing operations dropped 23 per cent to $861 million. Discover almost doubled provisions for loan losses and warned that it could set aside more this year. The lender said income from continuing operations slumped 27 per cent to $178.9 million.Capital One, the Mclean, Virginia-based credit-card lender and bank, had to add $208.6 million to loss reserves and said it expects about $7.2 billion in soured loans in the next year.
But Mastercard did come out with some sort of good news today: Bloomberg: MasterCard Inc., the world’s second- biggest credit-card company, posted a $193.6 million loss on costs to settle an antitrust lawsuit with Discover Financial Services.
The net loss of $1.49 a share in the third quarter compared with profit of $314.5 million, or $2.31, a year earlier, the Purchase, New York-based company said today in a statement distributed by PR Newswire. Excluding the expense, profit was $322 million, or $2.47 a share, beating the $2.24 average estimate of 21 analysts surveyed by Bloomberg.
MasterCard’s settlement with Discover allows Chief Executive Officer Robert Selander to focus on expanding credit and debit- card revenue amid the economic slowdown. The company lost more than half its market value since reaching $320 a share in June on concerns the U.S. slump is spreading overseas, where MasterCard generates half its revenue.
Shares still dropped though:
…MasterCard slipped $3.93, or 2.7 per cent, to $143.89 at 4:01 p.m. in New York Stock Exchange composite trading.
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