【出版时间及名称】：2010年美国信用卡行业前景展望
        【作者】：瑞士信贷
        【文件格式】：pdf
        【页数】：36
        【目录或简介】：

Executive Summary
We believe that the current environment faced by credit card issuers is one of the most
challenging in the history of the business. Overall, at least three major factors conspire to
reduce returns and increase risk.
First, we believe that the credit environment will be worse than most investors expect, as
losses will likely continue to rise in early 2010 and stay high for a longer period of time.
This is a result of severe job losses in this cycle and the prospect of a slower recovery. In
prior cycles, credit did not improve until after a period of sustained job gains.
Second, we believe that the effects of the CARD Act coupled with the overall attitude of
the current Administration and Congress regarding consumer protection will likely continue
to siphon revenues and profits from the industry over the next several years. In a nutshell,
there will be no winners and all will likely lose a considerable proportion of card earnings
as a result of the combination of prohibited practices and more intense competition
Third, we believe that competition will likely erode the revenue benefits gained by recent
repricing. The repricing initiatives have been at best uninspired. The desire to reduce risk
will force greater price competition as issuers crowd into the prime segment. In addition,
the large diversified banks control more than 60% of industry receivables. These banks
may elect to use strong earnings from other business segments into the credit card
business to subsidize incremental competition. This may mean that the issuers most
exposed to the effects of the CARD Act are those who derive the highest proportions of
their earnings from their respective card business.
We continue to believe that credit card interchange in the United States will likely come
under pressure. While there is a remote possibility that the interchange legislation will pass
in 2010, we think the more likely way in which interchange will be pressured is through
litigation. We expect that the bankcard networks will settle the merchant litigation once a
trial date is set and draws near. While the networks will delay this as long as possible, it
could happen in late 2010 or 2011. A settlement could result in both a cash payment to the
merchants as well as a noticeable decline in interchange rates.
Lastly, consumer preferences are evolving away from credit cards to debit cards. While it
remains to be seen whether this is a temporary phase or a more permanent change, we
expect that the industry’s repricing efforts will likely increase the level of consumer
dissatisfaction and raise the proportion of consumers willing to switch.
We highlight Visa (V) and MasterCard (MA) as the stocks within our universe best
positioned heading into 2010. First, improving spending volumes should translate into
higher revenue growth for both Visa and MasterCard. Second, despite the global
economic downturn, the secular shift from cash to plastic continues.
The major risk to card issuers is that revenue gains will be competed away. This will likely
start in 2010 as mail volume climbs-off the cyclical trough. We maintain our Neutral ratings
on Capital One (COF) and Discover (DFS). While both companies have managed credit
quality well over the last year, further increases in credit costs combined with reduced
revenues under the CARD Act keep us on the sidelines. We reiterate our Underperform
rating on American Express as we believe longer-term, there will be pressure on the
merchant discount rate. In addition, the company’s lack of debit business puts it at a
competitive disadvantage relative to Visa MasterCard.