22 Card Portfolios Sold In 1Q; Penetration Rate Down

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The the first quarter of this year, 22 credit unions with card portfolios of more than $1 million in outstanding balances have sold those portfolios, with four being greater than $10 million.

According to analysis by Brookwood Capital here, total balances sold year-to-date have been approximately $147 million. "While it is too early to use this quarter's results to predict what will happen in the remainder of the year, both the dollar value of these sales and the number of transactions are on pace to outpace year's 67 portfolios sold with $459 million in associated outstandings," the company said. "On average, the size of the portfolios sold this year has decreased slightly from last year's average of $6.9 million to this year's average of $6.7 million."

Meanwhile, in a separate analysis of credit card portfolios, Portland, Ore.-based AssetExchange, the leading credit card portfolio brokerage firm, said that during the first quarter of 2005, the approximate 2,100 credit unions with credit card portfolios of $1 million and larger saw a decline in card penetration.

AssetExchange, which offers credit card portfolio brokerage services, said that the percentage of members who have credit union credit cards declined to 18.1% in March, 2005, down from 18.8% one year earlier.

Among its other findings: Total card assets for portfolios over $1 million increased from $20.1 billion in March 2004 to $20.9 billion in March 2005. "This is less than 1% growth in inflation-adjusted dollars," the company said.

Total card assets for portfolios over $1 million continued to decline as a percentage of total assets, falling to 3.96% in March 2004 from 4.00% in March 2004.

* The percentage of portfolios that grew more than the rate of inflation during the previous 12 months fell from 46% in March 2004 to 44% in March 2005. "Thus 56% of portfolios shrunk in real dollar terms during the 12 months ending in March 2005," AssetExchange stated. "This is occurring even as total card assets edge upward because growth among a minority of larger portfolios is offsetting shrinkage among many smaller portfolios."

* Approximately 21 credit unions larger than $1 million sold their credit card portfolios during the first quarter of 2005, with a combined volume of roughly $144 million. This represents a 17% increase in portfolio sales and a 14% increase in volume over the first quarter of 2004.

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