The demand for ATMs that accept envelope-free deposits has waned of late as the three largest U.S. banks deploying the machines have completed their rollouts. But one of the chief makers of the machines is starting to see an increased demand from smaller financial institutions.
“We are beginning to see a pickup in the mid majors, the regional banks,” William Nuti, NCR CEO, told analysts during a conference call to discuss third-quarter earnings (
Smaller banks are seeing the rollout successes of their larger competitors, Nuti said. “So there’s a bit of healthy paranoia that’s leaked into that mid-major segment,” he noted. “I expect that 2011 and ’12 will be rollout years for the mid-majors. And the regional banks, and I expect them to pick up materially in those two years.”
Continued stabilization of the economy could play a role in determining whether such projections hold true, analyst Gil B. Luria of Los Angeles-based Wedbush Securities tells PaymentsSource. “If another crisis happens around banks or mortgages, they might step back,” he says. “But right now they’re thinking about investing in the future.”
Both NCR and its chief bank-ATM competitor Diebold Inc. have cited increased interest in deposit automation among smaller institutions, but neither expects much growth in demand for the machines this year, Luria says. “But both expect them to have a big impact next year,” he says.
Also encouraging, and somewhat surprising, for NCR was its success during the quarter in Europe,” Luria says. “Broadly speaking, most thought Europe would lag in recovery, so it’s encouraging to see growth there,” he says.
During the analyst call, Nuti similarly expressed surprise at the improved economic climate in Europe and how it has helped the ATM maker.
“We’re knocking the cover off the ball in Europe this year, Western Europe in particular–the United Kingdom is having a terrific year for us,” he said. “Some of the key drivers there have been not just (point-of-sale) self-checkout (services) but also ATM. Our ATM business in the UK is picking up. … We would have liked to have seen better growth out of Spain and Italy, and slightly better out of France, but France is doing okay.”
NCR reported 10% growth in third-quarter revenue from the Europe/MiddleEast/Asia region, to $429 million from $390 million during the same period last year. Americas revenue grew by just 4.1%, to $535 million from $514 million.
What do you think about this? Send us your feedback.
