Bankard sells Visa shares to Bank of Nova Scotia

Bankard Inc. is reportedly earning approximately $2.3 million from its sale of its remaining holdings in Visa International to Bank of Nova Scotia.

Bankard is in the credit card business. Rizal Commercial and Banking Corp. (RCBC) is the majority equity holder of Bankard.

It sold its remaining 41,812 common shares in Visa at $55.35 per share, although discounted at 11.75 percent under a shares purchase agreement.

“We received confirmation from Well’s Fargo, stock transfer agent of Visa Inc., that the remaining Visa shares of Bankard were transferred in their books in favor of Bank of Nova Scotia based on transfer letter forwarded to them last Dec. 23, 2008. We expect to receive the proceeds from Bank of Nova Scotia via wire transfer on Jan. 15, 2009,” Rafael Andres R. Reyes, chief information officer of Bankard, reported yesterday.

In the first quarter of 2008, Bankard sold its first tranche of Visa shares for P170.4 million. This one-time gain, in fact, helped the credit card company record good performance for the first nine months of 2008.

In the first nine months of 2008, it reported a more than 300 percent increase in net income due mainly to the sale of Visa shares. From over P54.8 million from January to September 2007, net income rose to P227.7 million in the same period last year.

But net income dropped by 25 percent in the third quarter of 2008, or from P23.8 million in the same period in 2007 to just P17.9 million.

Costs and expenses in the third quarter alone rose 46 percent to P61.8 million on higher employee benefits, management and professional fees, taxes and licenses, and occupancy and equipment-related expenses.

Service fees during the nine-month period however rose 15 percent to P151.3 million.

Total assets end September last year fell 32 percent to P637.8 million, from P939.2 million at the end of 2007.

However, a total of P2.9 billion of provisioned card receivables still smeared the company’s books.

Total equity decreased to P520 million from P770 million end 2007 due to deferred tax assets worth P516 million and net decreases.

Bankard is a licensee of MasterCard International Inc. (MasterCard), JCB International Co. Ltd. (JCB) and VISA International Service Association (VISA) to issue credit cards.