Despite signs that competition is hurting profit margins, credit card banks have posted another strong quarter.

The healthy profits can be viewed most clearly through the three highly efficient, specialist issuers that investors view as a proxy for the card industry:

* First USA Inc. earned $12.9 million, more than double what it earned in the same period of 1992.

* Advanta Corp. reported a 67% increase, to $17.2 million.

* MBNA Corp. boosted its quarterly net by 20.1% to $46.1 million.

All the results reflect growth in card loans, as new categories of merchants such as supermarkets are starting to accept the cards.

"In general, business appears strong," said analyst Mark Alpert of Alex. Brown & Sons.

Volume Up 20%

The bank card associations have reported 20% growth in overall volume, and the specialists have been growing faster, Mr. Alpert said.

But increasingly intense price competition is beginning to hurt margins.

The first sign of that came earlier this month, when Signet Banking Corp. reported a 32-basis-point slip in its net interest margin, to 5.03.

The Richmond-based banking company has been building its credit card portfolio with one of the more aggressive low-interest-rate strategies in the nation. Its earnings were up 51% from the 1992 second quarter, at $40.4 million, much of the gain attributable to the growth in card receivables.

But investors, concerned about card profitability rates, dumped Signet's stock when the report came out.

Analysts discounted the margin decline, saying it was due mostly to an increase in funding costs. To the extent that card pricing was a factor, it was unlikely to presage a general problem in the credit card sector, they contended, because few banks are pricing as aggressively as Signet.

First USA's Margin Slips

Nevertheless, First USA also saw its margin on managed credit card loans fall - by 16 basis points since March 31, to 7.65% at midyear.

That was believed to be mostly the result of a 500 million securitization that temporarily took earning assets off the books. But observers noted it was the first full quarter in which Delaware-based First USA Bank was offering a preapproved gold card at rates as low as 9.9%.

The net interest margin at Advanta, the parent of Colonial National Bank of Wilmington, slipped in the quarter by 2 basis points to 7.72%. That was also off from 8.46% in the second quarter of 1992. A spokeswoman attributed the change since last year to a repricing in November, when the issuer removed a floor of 18% on its loan rates, allowing rates on many cards to drop to around 14%.

MBNA, meanwhile, saw its margin expand in the latest quarter to 8.55%, from 8.26%, primarily as a result of a decrease in the cost of liabilities. "We don't just compete on price," a spokesman said. "We compete on the quality of the product, the quality of service."

Inevitable Changes

Whether or not the margin pressure represents a turning point for credit cards remains to be seen. But as Samuel G. Liss of Salomon Brothers Inc. pointed out in a report released before the earnings season, it is inevitable that price competition and an increase in funding costs from today's historically low levels will reduce margins.

According to RAM Research of Frederick. Md., the weightedaverage interest rate on a standard card has slipped to 17.29% from 17.84% in January and from 18.40% in June 1992. The average annual fee on a standard card has fallen to $16.85 from $17.20 in June 1992, RAM said.

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