Total System Services Inc. said several recent foreign deals could offset client losses resulting from consolidation in the U.S. banking industry.

The Columbus, Ga., processor has already said it will lose the card processing business of Washington Mutual Inc. (JPMorgan Chase & Co., which bought Wamu's banking operation in September, will start handling the work in-house by March.) Philip W. Tomlinson, TSYS' chief executive, said Tuesday that he is negotiating to retain Wachovia Corp. (which Wells Fargo & Co. bought at the end of last year) as a customer.

Wachovia, which has used TSYS since 2006, is a valued customer but "not a huge customer," Mr. Tomlinson said in a fourth-quarter earnings call with analysts.

Wells' decision about whether to retain the relationship with TSYS is not "anywhere close to being made," he said. "It may or may not be made before the year is over, but we certainly think that we would have a chance to retain what we have and possibly get the Wells business, and we are certainly going to give it out best shot."

TSYS has bright prospects in other countries, he said. It announced a deal Tuesday to handle Deutsche Bank AG's German charge and credit card portfolios. "It's a huge win in Germany, and I think it absolutely increases our global footprint, as well as our credibility across that continent."

On Monday, TSYS announced it has finished moving accounts from the Dutch acquirer and issuer PaySquare BV to its systems. PaySquare, which had been shifting its processing work to TSYS since October, offers merchants acceptance of MasterCard Inc., Visa Inc., China UnionPay, and JCB Co. Ltd. cards.

Last week TSYS announced that China UnionPay Data Services Co. Ltd., its joint venture with China UnionPay, would handle processing for Bank of East Asia.

TSYS has also signed a letter of intent with a Brazilian company. Mr. Tomlinson would not name the company, but he characterized it as a leading retailer with 8 million private-label credit cards.

This is "another really big win and another stake in the ground for TSYS," he said.

Nevertheless, "the world's economies are in a terrible recession. … Financial institutions remain under stress, and no one expects 2009 to be an easy year," Mr. Tomlinson said. "We expect 2009 to be a tough year for our customers, which will certainly create headwinds for TSYS."

Those headwinds are already accounted for in TSYS' guidance for this year, he said. It expects its revenue to be flat or up 2% over last year, to a range of $1.94 billion to $1.98 billion; net income will likely be flat or drop 3%, to a range of $243 million to $250 million.

Those projections assume that the economy will stabilize in the second half, and that TSYS will not lose any more large clients beyond what it has already announced, Mr. Tomlinson said. Even losing Wachovia's business would not have a large impact, he said, and it would not lose that business for some time.

Few current clients are trying to get their fees lowered, he said, though such negotiations continue to take place when contracts are up for renewal.

TSYS' fourth-quarter revenue grew 7.6% from a year earlier, $493 million. Full-year revenue grew 7.4%, to $1.939 billion.

Fourth-quarter net income grew 45.2%, to $66.3 million. Part of that gain resulted from one-time charges posted in the fourth quarter of 2007. Full-year net income grew 5.3%, to $250.1 million.

Sanjay Sakhrani, an analyst with KBW Inc.'s Keefe, Bruyette & Woods Inc., wrote in a research note Wednesday that he is "on the sidelines" with regard to TSYS' performance and prospects.

"Clearly, these are challenging times," and TSYS "is not immune to the pressures, given its relatively meaningful exposure to card issuer processing and, to a lesser extent, a slowdown in consumer spending habits," he wrote.

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