Credit Card Profitability: Middle East & Africa - A Lafferty Research Report

News provided by

Jul 07, 2014, 10:33 ET

LONDON, July 7, 2014 /PRNewswire/ -- Reportbuyer.com has added a new market research report:

Credit Card Profitability: Middle East & Africa - A Lafferty Research Report

http://www.reportbuyer.com/banking_finance/debit_credit_cards/credit_card_profitability_middle_east_africa_lafferty_research_report.html

The credit card offers potentially the single most profitable product in all of retail banking. And, as the worst effects of the financial crisis begin to recede, so credit card profits are beginning to rebound. Meanwhile, vast areas of the world are still significantly underpenetrated and promise rich rewards for well executed credit card business ventures.

• But what are the dynamics behind credit card profitability?
• How and why are credit card revenue streams changing?
• What are the effects of – and trends in – credit losses?
• And what can be learned by comparing credit card markets at different stages of maturity?

These are among the significant questions addressed by Credit Card Profitability, a new series of Lafferty business research reports covering the following global regions:
• Asia-Pacific
• Eastern Europe
• Latin America
• Middle East and Africa
• North America
• Western Europe

Credit Card Profitability looks at the credit card revenue mix in four distinct categories: net interest revenues, revenues generated by merchant service charges, card fee revenues and other non-interest income.

In many markets, net interest income is the dominant source, often accounting for up to half of all revenues. But the financial crisis has resulted in significant deleveraging from consumers who have responded to adversity by paying down expensive debt and exhibiting a reduced appetite for credit, particularly revolving credit.

On the positive side, issuers have enjoyed historically low funding costs due principally to prevailing low interest rates, coupled with the effect of various stimulus packages in the wake of the financial crisis. Merchant fees make up the next biggest element but downward pressure on billed volume is having a negative effect in more mature markets. Similar pressure, often driven by regulatory bodies, is being exerted on merchant service charges.
In response, many issuers have turned towards new or increased card fees that have the effect of increasing revenues and, more appropriately, reflect the risk associated with credit card issuance. They have also sought to boost other non-interest charges yet, once again, efforts in this area are being stymied in many countries by regulatory intervention and organised consumer action.

Meanwhile, the worst may be over in terms of net credit losses, which doubled between 2006 and 2009 on a global basis, peaking at 7.7 percent in 2010, and were the main cause for the halving of over global credit cards profits between 2008 and 2010.

As net credit losses stabilise and begin to reverse, the outlook for the global credit card market is set to brighten considerably and give issuers much cause for optimism in 2012 and beyond.

Contents

Executive summary 1
research summary 3
Global versus Middle east and africa profit per credit card 5
Middle east and africa credit cards per 100 adults 6
Middle east and africa GDp per capita and credit card penetration 2009 8
Credit card revenue mix 2009 10
Global credit card penetration per 100 adults 11
Global credit card penetration per 100 adults 2005-2010e 12
Middle east and africa average annual card fee 13
Global average annual credit card fee by region 13
Middle east and africa average merchant service charge 15
Growth in consumer debt by category 16
Middle east and africa: percentage point difference between apr minus funding rate 17
Middle east and africa payment cards 19
Middle east and africa total credit card billed volume 21
Middle east and africa poS/atM credit card billed volume 21
Middle east and africa credit card outstanding debt 22
Global average credit card outstanding debt by region 24
Middle east and africa: average credit card outstanding debt by country 24
Middle east and africa credit card net credit losses 25
Middle east and africa credit card profitability 26
Middle east and africa: pre-tax profits CaGr 27
Middle east and africa: profit per card 28

Bahrain 31
Bahrain: card numbers by type 33
Bahrain: credit card metrics 33
Bahrain: credit card profitability indicators 34
Bahrain: credit card profit pool 37

Egypt 39
egypt: card numbers by type 41
egypt: credit card metrics 41
egypt: credit card profitability indicators 42
egypt: credit card profit pool 46

Jordan 49
Jordan: card numbers by type 51
Jordan: credit card metrics 52
Jordan: credit card profitability indicators 52
Jordan: credit card profit pool 56

Kenya 59
Kenya: card numbers by type 61
Kenya: credit card metrics 62
Kenya: credit card profitability indicators 62
Kenya: credit card profit pool 64