Despite the continued deterioration in credit quality, it was another strong quarter for the four credit card specialists.

Though the monolines still outperform other issuers, experts say a chasm is developing between them as delinquencies and chargeoffs pound the business.

"There are big gaps between the better and the worse players," said Moshe Orenbuch, senior analyst, Sanford C. Bernstein & Co. "The best was MBNA and the worst was Advanta." By all measures, MBNA Corp. is pulling away from the pack. The second-largest issuer increased its net income by more than one-third, while its losses stayed below the industry average, at 3.3%. Its receivables rose $11.9 billion from last year, and it added 7.5 million new accounts.

At the other end of the spectrum, Advanta's earnings grew 20%, while its losses climbed above the industry average. Nevertheless, it increased receivables by $4.1 billion and added 340,000 new accounts.

"The question is, how good was good and how bad was bad," Mr. Orenbuch said. "If Advanta was bad, it's still a great business."

Even though it was a good quarter for the credit card specialists- Advanta Corp., Capital One Financial Corp., First USA Inc., and MBNA Corp.- they expect a bumpy road ahead as chargeoffs rise. The monolines increased loan-loss provisions between 14% and 149% to replenish loan-loss reserves after chargeoffs were taken. The loan-loss provision is a measure of losses sustained by the monolines and losses they expect in the future.

In the case of Capital One, the increase of 149% in its loan-loss provision was tied to the unsecuritized portion of its receivables, which is larger than the other monolines'.

Overall, the credit card specialists met or beat the expectations of Wall Street analysts, according to First Call Corp., Boston.

MBNA was far and away the leader for fourth-quarter earnings.

The Wilmington, Del.-based card giant had a net income increase of 35.6% from 1995's fourth quarter, to $149.4 million.

Estimates of quarterly earnings per share were met at 41 cents, as were annual earnings estimates of $1.33.

Not far behind was First USA Inc., now the fourth-largest issuer of bank cards. The Dallas-based company, which will be acquired by Banc One Corp. of Columbus, Ohio in May, will then move up a notch in the rankings.

First USA increased its net income 34% in its fiscal 1997 second quarter, to $79.1 million. Quarterly earnings of 58 cents beat analysts' estimates by 2 cents. Analysts estimated First USA's annual earnings for the current fiscal year at $2.31 per share. The per-share earnings for fiscal 1996 were $1.85.

Advanta Corp., based in Spring House, Pa., saw a net income increase of 20%, to $45.2 million. It reported quarterly earnings of $1 a share, beating analyst estimates by 1 cent, and surpassing last year's fourth quarter results by 15 cents. Annual earnings per share were $3.89, up 69 cents from last year.

"Its earnings quality was not the best we've seen," said Michael J. Freudenstein, an analyst for J.P. Morgan & Co. Analysts had higher expectations for the eighth-largest issuer's quarterly earnings.

Based on its old method of accounting, Advanta's losses would be 5.1%. Using the new method, which takes up to 90 days to account for bankruptcies, losses were 4.6%. Mr. Orenbuch said Advanta's loss rate would be "in the upper 5's for 1997."

MBNA's losses will be between 3.6% and 3.7%, he said.

Capital One, Falls Church, Va., also beat analysts' fourth quarter estimates by a penny at 60 cents a share. Earnings grew by 6.61%, to $40.3 million. The slight increase, the ninth-largest issuer said, was related to its spinoff from Signet Banking Corp. in 1994.

"Quarterly earnings will resume being like the annual growth rate," said James M. Zinn, chief financial officer. "We feel like we are faring very well. We met our goal for 20% year-over-year growth and equity of 20%."

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