Only two credit unions sold their credit card portfolios in the third quarter, recently released data show.
Of the nearly 2,200 credit unions that have credit card programs with balances of $1 million or more, seven this year had sold their portfolios through the end of September, according to TRK Advisors. Total credit card balances for the third quarter’s sales were $23 million, and sold receivables for the first three quarters totaled $85 million within the credit union market, the company said.
The year will finish with total sales of more than $100 million for the first time since 2009, TRK Advisors said. Sales volumes are expected to remain below the high water marks of 2004 to 2007, when more than 60 portfolios per year were sold, and TRK is uncertain whether sales will rebound further from current levels.
“Though improving purchase prices are not approaching levels seen prerecession and are not expected to return to those levels in the foreseeable future,” TRK Advisors said in a news release. “To help maximize their returns, some sellers have had success improving their sale prices by aggressively negotiating third-party brokerage commissions and retain more of the buyer’s purchase offer instead of accepting industry standard commissions. Whether this will result in a wholesale realignment of the portfolio-brokerage business remains to be seen.”
As their portfolio-sale contracts signed over the past seven years expire, more banks and credit unions are starting to get back into credit card issuing (
