PETERBOROUGH, N.H.-Through the middle of 2011, five credit unions with card programs with balances of $1 million or more sold those portfolios. Four of those sales came in Q2, according to analysis from TRK Advisors.
Total credit card balances for all five were $62 million. These sales levels are the highest since 2009 and already exceed 2010 totals of three sales for less than $20 million, the company said.
"It is not yet clear if this uptick is representative of increasing transaction levels to come or more reflects the go-forward, lower levels of portfolio sales when compared to the high water marks of 2004-2007," said TRK Advisors.
"In those years sales often totaled more than 60 per year accounting for hundreds of millions in portfolio balances," the company noted. "Anecdotal evidence and surveys of the buyer community suggests more credit unions are exploring a sale than in the recent past, though with prices below previous highs (and likely to stay there) sales can be difficult to close."
But the firm is seeing some improvements on the horizon. "Recent improvements if credit risk metrics and profitability have been supporting higher valuations, though limited buyer competition and transaction costs can make reaching financial terms difficult," the company said.
For info: www.trkadvisors.com.
