Hot Quarter for MBNA: Profits, Cardholder Total Surge Ahead by a Third

MBNA Corp., the nation's second-largest credit card lender, has recorded yet another quarter of significant growth and healthy profit margins.

The Newark, Del.-based company reported a 31.9% increase in net income in the second quarter, compared to the same period last year.

The $12 billion-asset company also added a record 4.1 million new cardholders for a total of 16 million.

Pointing out that the company had also reported a 31% increase in first- quarter earnings, analysts said they were happy with the issuer's consistent performance, and expected to see continued earnings improvement in the second half.

The Federal Reserve's recent decision to drop interest rates did not concern Moshe Orenbuch, an analyst at Sanford C. Bernstein & Co. He said that two-thirds of MBNA's receivables are fixed rates, "so they tend to get a benefit."

MBNA reported that net income for the second quarter was $76.8 million, or 51 cents a share, compared with $58.2 million, or 39 cents a share for the second quarter of 1994.

For the first six months of this year, net income rose to $145.6 million, or 96 cents per share, compared with $110.6 million, or 73 cents per share for the first half of 1994.

The board of directors declared a quarterly cash dividend of 21 cents a share, payable Oct. 1, to stockholders of record as of Sept. 15.

Continuing to concentrate on the association and affinity markets, MBNA said it had added 406 new organizations to its ranks in the quarter, along with 3.3 million new accounts. The company says its credit card products are endorsed by 3,000 membership organizations and nearly 1,000 financial institutions.

Total managed loans as of the end of the quarter stood at $22.7 billion, a $8.5 billion increase since last year.

Delinquency on total managed loans was 3.23% at the end of the second quarter. Managed loan losses for the second quarter were 2.64%, down from 2.75% for the second quarter of 1994. The company said delinquency and loan losses continue to be significantly lower than published industry levels.

Dominick Fontana contributed to this report.

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