Through March 31, 20 credit unionss with card portfolios with more than $1 million in outstanding balances have sold their portfolios, according to Brookwood Capital, which assists CUs in conducting strategic reviews of their portfolios to determine whether to sell or keep them.
Of the 20 portflios sold, three of them were greater than $10 million in oustandings. Total balances sold year-to-date have been approximately $115 million.
Both the number of sales and the total portfolio balances sold puts the portfolio sales pace slightly ahead of last year's, when 60 portfolios of greater than $1 million sold for a total of approximately $420-million in receivables. On average, the size of the portfolio sold decreased slightly from last year's averages, to a little less than $6 million.
"These trends indicate that many credit unions are continuing to take strategic looks at their credit card product lines," Brookwood suggested. "While these portfolios are nearly always profitable, many smaller issuers are trying to find a way to issue a stronger product set while lowering their institutional risk profile and increasing the bottom line. In some cases partnerships can provide such an outcome, but...if this is so in each individual case requires a thorough and careful analysis."
