First USA Inc. has fired another warning shot over MBNA Corp.'s bow.
The nation's fourth-largest bank card issuer, which is based in Dallas, announced that it has hired William V. Nutting as senior vice president of affinity marketing. Mr. Nutting, 42, was senior vice president at Retailer Financial Services Inc., Stamford, Conn., a subsidiary of General Electric Capital Corp.
He could not be reached for comment.
Industry experts called Mr. Nutting's arrival another salvo at MBNA, whose dominance in the affinity partnership market was scarcely contested. MBNA grew to be the nation's second-largest bank card issuer by developing thousands of affinity relationships.
First USA has made some headway. Since 1992, it has had an exclusive arrangement with a Boston firm founded by Carl Novotny and Steven Marcus, who earlier designed affinity programs for MBNA. In January, their firm changed its name from Affinity Partners Inc. to First USA Partners.
Moshe Orenbuch, an analyst at Sanford C. Bernstein & Co. in New York, said First USA has had success in cobranding and affinity programs because it has tended to focus on smaller ones to "spur customer loyalty and decent revolving behavior."
In recent years, First USA's cobranded cards have included deals with Walden Books, Forbes magazine, the retailer Orvis, and Egghead Software. Its recent affinity deals include the American Kennel Club, World Wildlife Federation, Audubon Society, and a Newton, Mass., township card.
"First USA may bring some real price competition to the affinity market," said Robert B. McKinley, president of RAM Research Group, Frederick, Md. First USA has made advances using low teaser rates, but Mr. McKinley said it has reached the limit of that strategy.
"There is no question that they have an increased interest in trying to diversify their account growth strategy," said Mr. Orenbuch.
The Bernstein analyst noted that, in the last 12 months, First USA's accounts have grown 47%, from seven million at the end of March 1995 to 10.4 million at the end of March this year. Balances grew 53%, from $12 billion at the end of the first quarter last year to $18.3 billion at March 31 this year.
MBNA reported 47.1% growth in balances outstanding during the same period, Mr. McKinley said, going from $18.9 billion to $27.8 billion.
Mr. Orenbuch pointed to an executive hiring spree at First USA in the past year as further proof that it is trying to diversify. The staffing up began last August when Jack M. Antonini left USAA Federal Savings Bank to become First USA's vice chairman for finance and planning.
The Wednesday announcement that mentioned the hiring of Mr. Nutting included two other senior management hires.
*Jeffrey Chittendon signed on as executive vice president and chief information officer. He will direct development of the company's technology infrastructure, reporting to Randy L. Christofferson, president of First USA Bank. He previously was enterprise architect at J.P. Morgan & Co.
*Irv Becker was named senior vice president of compensation and benefits. He will manage all company compensation, health, and welfare plans, as well as payroll, and will report to Daniel C. Barr, senior vice president of corporate human resources. He was director of compensation and benefits at Home Depot.
Mr. Nutting will report to James W. Stewart 3d, executive vice president of partnership marketing at First USA Bank, and be business manager of First USA Partners.
He was responsible for the growth of private-label cards at GE Capital, said James L. Accomando, president of Accomando Consulting Inc., Fairfield, Conn.
"Bill Nutting is coming in as a business manager for relationship products," Mr. Accomando said. First USA "will grow their business through relationships. They are modeling themselves on the MBNA philosophy."
