The three credit card specialists - Advanta Corp., First USA Inc., and MBNA Corp. - again impressed analysts with strong growth and continued improvement in credit quality in the latest quarter.

Advanta, based in Horsham, Pa., earned $20.3 million, up from $13.7 million in the same quarter of 1992.

Dallas-based First USA earned $17.2 million, not counting the effect of a one-time charge of about $10.5 million to retire acquisition debt in the quarter. The $17.2 million compared with $7.1 million in the 1992 quarter.

MBNA, headquartered in Newark, Del., earned $56.6 million, up from $46.7 million.

The results prompted Moshe Orenbuch, bank analyst for Sanford C. Bernstein & Co., to raise his earnings estimate for First USA by 15% to $2.85 per share for fiscal 1994. He predicted First USA and MBNA would outperform the overall stock market.

Susan L. Roth of Kidder Peabody called the results "phenomenal." She was most impressed by Advanta, raising her 1994 earnings estimate on the company 25 cents, to $2.45.

As specialists that focus almost entirely on managing credit card portfolios, the three banks have some advantages over diversified full-service banks that compete for the same business.

But analysts often look to MBNA, First USA, and Advanta for an indication of business conditions for credit card issuers. By this measure, the business clearly is on the rise.

New Accounts

Mr. Orenbuch's year-to-year comparisons indicate balances of First USA, which has $4.2 billion of outstandings, increased by 72%, fueled by a 47% increase in the number of accounts.

MBNA, with 11.3 billion in outstandings, grew its balances by 23% year over year. Advanta, with $3.4 billion, grew by 43%.

At the same time, credit quality continued to improve for the three issuers.

MBNA's loss per $100 of outstanding loans fell 47 cents, to $2.83. Advanta's loss rate improved by 1.61 points, to 3.22%.

And First USA's already low rate improved another 1.17 points, to 2.54%.

Ms. Roth said net interest margin was one area in which Advanta outshined the others. In the quarter, Advanta's margin widened by 33 basis points, to 8.05%, thanks to higher yields on its assets and a lower cost of funds.

First USA's margin shrank by 55 basis points, to 7.10%, a change Ms. Roth attributed to a solicitation strategy that relies on an introductory rate of 11.9 and 9.9% on balances transferred.

MBNA's margin slipped a modest 8 basis points to 8.55%, reflecting a 60-basis-point decline in MBNA's overall credit-card portfolio yield, to 16.2%.

Ms. Roth said she viewed the shrinking margin is a positive for MBNA. "The cost of account repricing should be viewed as marketing dollars well spent," she said, Predicting continued double-digit growth in receivables will result from the pricing change.

|The timing could not be better," she added, noting that MBNA continues to benefit from the opportunity to refinance maturing securitizations at more attractive rates. Among other major competitors in the credit card arena, Dean Witter, Discover & Co. reported net income of $171.6 million, up 52% from a year-earlier. Credit services income increased 23%, to $483.9 million. Expenses increased about 15%, offsetting some of the gain, the Sears Roebuck & Co spinoff said in its release.

American Express Co. earned $420 million, compared with a loss of $205 million a year ago. Its Travel Related Services unit, which offers charge and credit cards, reported income of $236 million, compared with a loss of $187 million a year ago.

The company said revenues were down, partly because fewer cards are in circulation. Spending per card was higher, American Express said.

The release provided the latest evidence that American Express is resolving the problems that had cropped up in its Optima revolving card venture:

"The provision for losses also decline significantly from last year's third quarter, reflecting ... improvements in credit management." A Booming Business Third quarter, years to yearcomparisons Charge Balances volumeAdvantaCorp. +43% +47%First USAInc. +72% +60%MBNACorp. +23% +26%

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