PORTLAND , Ore., March 31, 2003 – AssetExchange, the leading credit card consulting and brokerage firm for credit unions, has compiled a 2002 trend analysis for credit union credit card portfolios.

AssetExchange found that in 2002 over 40 credit unions sold their credit card portfolios – a 30% increase over 2001. Portfolios that sold ranged in size from less than $1 million to over $30 million. Among credit unions that sold their card portfolios, total asset size ranged from less than $10 million to $500 million. AssetExchange facilitated approximately 40% of all credit union card portfolio sales larger than $1 million.

Premiums and revenue-sharing offers for portfolios remained strong. “It is not customary for buyers or sellers to disclose pricing information, but the portfolios we handled in 2002 received excellent premium and revenue sharing offers,” said William C. Koo, AssetExchange CEO. “Credit unions found themselves in strong negotiating positions and leveraged the competition to structure unique partnership terms and contracts. Some credit unions, for instance, opted for lower premiums in exchange for higher ongoing revenue-sharing.”

Credit union credit card assets experienced essentially no growth in 2002, while the card industry as a whole grew by about 8.5%. Thus, the CU credit card industry market share continued its decline in 2002, with credit unions now holding 3% of the $661 billion in general purpose credit card debt.

As in 2001, most credit union card portfolios shrunk: 63% shrunk in 2002 (up from 57% in 2001). Shrinkage was particularly prevalent among smaller portfolios, with fully two thirds shrinking. However, even among portfolios over $50 million, more portfolios shrunk than grew.

A few credit unions have been able to buck the trend and grow their card portfolios, and these prevented credit union card assets as a whole from declining in 2002. However, only about 20% of credit unions were able to match or exceed the average growth rate outside credit unions.

Credit union charge offs in 2002 were about 2.2%, a roughly 12% increase over 2001 levels. In spite of this increase, charge off levels among credit unions remain below the card industry average of 6.1%. Few credit unions have experienced major charge off problems, with only about 4% having card charge off rates above 5%.

About AssetExchange
AssetExchange is a credit card portfolio consulting and brokerage firm for credit unions. Services include free Strategic Card Assessments, portfolio growth consulting, and the facilitation of credit card portfolio sales between credit unions and multiple credit card issuers. For additional information, please visit www.AssetExchange.com or call (503) 220-0007.