Fresh from its spinoff in April from Ford Motor Co., Associates First Capital Corp. is in a position to give competitors fits in the cobranding and private-label parts of the business.

Both products require adroit management of relationships with partner companies, which the diversified Dallas-based lender considers "a core competency," said Joseph N. Scarpinato, executive vice president in charge of credit card operations.

"We like dealing with large companies that have big bases of customers, and we assign dedicated teams to them," he said. "We never lose sight of our primary reason for being: to sell more of their products."

Many others have stumbled financially in cobranding deals, and some companies have simply given up on offering private-label credit on behalf of retailers, preferring the general-purpose benefits of the MasterCard and Visa brands. But Associates prides itself on an ability to innovate while maintaining long-term partner relationships.

"If you try to do these deals on a cookie-cutter basis, I don't think they work," said Mr. Scarpinato. "They have to be designed specifically with the needs of both organizations in mind."

Associates' most prominent partnerships are with petroleum companies. In 1994, it acquired Amoco's private-label card business, taking over an operations facility in Des Moines. Later, it entered into a similar arrangement with Texaco.

Associates also issues cobranded bank cards on behalf of Amoco, Citgo, Phillips, and Unocal. Some of these companies also offer private-label cards through other providers.

"When we offer a cobranded card in conjunction with an oil company, we're not trying to replace their private label," Mr. Scarpinato said. "A lot of customers like keeping their gas transactions separate from general merchandise transactions."

The ownership by Ford Motor from 1989 until this year had nothing to do with the oil industry emphasis. "The Associates was committed to the card business under Ford's ownership, and now that we're completely independent, we're committed to the business just as well," Mr. Scarpinato said.

The card unit represents 12% of Associates receivables but has more customer relationships than any other division, Mr. Scarpinato said.

With $6.4 billion of credit card loans and $1.5 billion of private-label balances, Associates ranks 15th among bank card issuers, according to The Nilson Report.

Less than two weeks after the April 7 spinoff from Ford, Associates announced the $896 million purchase of SPS Transaction Services Inc., a credit card and transaction processing business of Morgan Stanley, Dean Witter & Co. SPS' clients include Radio Shack, Goodyear, Conoco, and Philips Petroleum; they would boost the number of private-label bills the Associates sends monthly to 14 million.

When the SPS deal was announced, Keith W. Hughes, chairman and chief executive officer of Associates, said SPS' customers represented "extraordinary growth potential." Aside from issuing private-label cards for more than 40 organizations, SPS had commercial card relationships with OfficeMax, Staples, Office Depot, and seven others.

On its own, Associates markets many flavors of Visa and MasterCard. It actively courts college students and people with blemished credit records, while at the high end it pioneered with the Visa Signature card, which goes to people earning more than $100,000 a year.

In January, the company bought the cobranded bank card portfolio of J.C. Penney Co. Associates also does cobranding with True Value Hardware, GTE Corp., and Great Western Financial Corp.

Associates will be selective in evaluating portfolio acquisitions because "we're a niche player," Mr. Scarpinato said. "We don't send out 10 million pre-appoved offers a month, and we're not trying to be the biggest player."

"We have a lot of confidence in the Associates' acquisition capabilities," said Michael J. Freudenstein, an analyst at J.P. Morgan Securities Inc. "On the credit card side, they have been very good at buying troubled portfolios and pricing them appropriately.

"They selectively make acquisitions where they feel they can apply their superior collections skills."

"Our credit losses are typically somewhat higher than the industry average, but are offset by higher prices," Mr. Scarpinato said. "We serve certain niches that by definition would have somewhat higher losses, so we're probably not the most conservative in that regard."

The risk profile does not trouble analysts. "They pick their spots where the risk-return trade-off is attractive," said Thomas F. Theurkauf of Keefe Bruyette & Woods Inc.

He also finds it attractive that Associates' "international component continues to grow. There may well be Canadian, U.K., or Asian opportunities they haven't tapped yet."

Mr. Scarpinato said he already has beachheads in Japan and the United Kingdom. "Our strategy is not going to be to get all countries," he said. "We're going to pick countries that meet our profitability and strategic imperatives."

A one-time Chase Manhattan banker, Mr. Scarpinato, 53, was chief executive officer of Beneficial National Bank USA from 1981 to 1987. He then spent two years as chief executive of Primerica Bank and two years as president of Fidelity Investments banking services before joining Associates as executive vice president of operations in 1991. The next year he became president of the bank card unit.

Associates' spate of acquisitions is "nothing new but right now it gets headlines because the industry is consolidating" he said. "We are going to continue to play to that core competency of ours, but only if the individual deals make strategic sense."

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