Revenue from Western Union Co.'s consumer remittance business fell in the second quarter as the company stepped up its efforts to form more bank partnerships.
Christina Gold, Western Union's president and chief executive officer, said the company has started processing transfers for customers of U.S. Bancorp and is looking for additional deals with banks.
"We are definitely looking to sign more banks this year," Gold told analysts on a conference call Tuesday to discuss the company's second quarter earnings.
Western Union said Monday that Fifth Third Bancorp of Cincinnati would offer its services at Fifth Third branches.
U.S. Bancorp agreed in March to switch its transfer business to Western Union from MoneyGram International Inc.
Western Union's long-standing parnership with Bank of Nova Scotia shows that customers who send remittances through banks are often more attractive than those who use other walk-in agents, Gold said.
These tend to be "second-generation people" or immigrants who "have been in the country for 10, 20, 30 years, looking to send money back or to family. We see larger principal," she said. "And it is a fast transaction, because we can pull it right out of a bank account."
Western Union's net income fell 5% in the second quarter, to $220.2 million, or 31 cents a share, from a year earlier, topping Wall Street's average estimate of 30 cents a share.
Revenue fell 7%, to $1.25 billion, in line with analysts' expectations. Revenue in the consumer-to-consumer segment, which makes up 85% of the company's total, fell 7%, to $1.1 billion.
Western Union affirmed its 2009 earnings guidance of $1.18 to $1.28 a share and said it expects revenue for the year to fall 5%-8% as the ongoing recession curbs consumer money transfers and payments.
