Wednesday, April 24, 2002
Industry notes: Banking
Debit cards overtaking credit cards
More consumers are using their debit cards to grab and pay cash for goods and services instead of charging them.
Visa, the nation's largest credit card issuer, is processing more Check Card transactions than credit transactions, according to Cardweb.com, an online electronic payment service.
Visa Check Cards now make up 35.3 percent of the credit card company's total U.S. card volume, up from 17 percent five years ago. In 2001, Visa processed 6.9 billion debit card transactions versus 6.2 billion credit card transactions. Last year, Visa processed $323.8 billion in Check Card volume, up about 27 percent from 2000.
Of that amount, $205.3 billion was in purchases and $118.7 billion in cash advances.
Moreover, Visa's off-line debit or Check Card volume has more than tripled, though its market share has declined a bit to 77 percent from 84 percent since 1996, Cardweb.com says.
Visa has 117 million Check Cards and 260 million credit cards in the country.
Huntington upgrades computers at branches
Hoping to provide customers better and faster service, Huntington Bank plans to invest $40 million to upgrade computers at branches.
The Columbus-based banking company will invest the money to enhance computer systems at its 300 branches, which will include its 26 in Cincinnati and Northern Kentucky.
Huntington executives told the American Banker that it is upgrading its Internet banking to make it more customer friendly.
The system will allow tellers quicker and better access to products and services Huntington offers internally. The company also said tellers also will have better online access to do such things as comparison shop for rates on various products for customers.
Fifth Third earnings draw "buy' rating
Consistent earnings growth at Fifth Third Bancorp prompted an investment research firm to place a buy rating on the stock.
Zacks.com said it's encouraged by the ability of the parent of Fifth Third Bank to beat earnings estimates on a continuous basis.
The recommendation comes after Fifth Third last week posted a 27 percent gain in first-quarter profits, helped by rising profit margins from lending and increases in deposit fees.
Fifth Third, like other major U.S. regional banks, in recent years has focused more on increasing profits from fee-based businesses than basic banking services.
Zacks.com, part of Zacks Investment Research, compiles and issues such reports to individual and institutional investors.
First Franklin's profits down sharply
Lower interest income caused the parent of Franklin Savings and Loan to post a 56 percent decline in first-quarter profits.
First Franklin Corp. had earnings of $177,000, or 11 cents a share, down from $402,000, or 25 cents a share, a year ago.
The decline came as the thrift's net interest income fell to $1.3 million, down from almost $1.5 million a year ago.
Earnings for many smaller banks and thrifts have been reduced in recent quarters as lower interest rates have squeezed the margin between what they charge on loans and what they pay on deposits.
Franklin Savings, with assets of $282 million, operates eight branches in the Cincinnati area.
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Industry notes: Banking
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