1Q Earnings: Small Business Woes Continue to Affect Advanta

By Aspan, Maria | American Banker, May 1, 2008 | Go to article overview

1Q Earnings: Small Business Woes Continue to Affect Advanta


Aspan, Maria, American Banker


Following reports of deterioration in the small-business loan portfolios of several large banking companies, Advanta Corp., which specializes in issuing credit cards to small businesses, posted a 68.4% drop in its card-related income, to $6.7 million.

The Spring House, Pa., company said Tuesday that its overall first-quarter profit fell 14% from a year earlier, to $18.4 million. Of that, $11.7 million came from gains on Visa Inc.'s initial public offering.

Advanta's provisions for credit losses nearly tripled, to $28.4 million. It added 67,000 customers, nearly a third less than a year earlier. Transaction volume inched up 1.4%, to $3.4 million. Managed receivables grew 12.2%, to $6.3 million, but chargeoffs surged 313 basis points, to 6.43%.

"This is a very difficult environment," Dennis Alter, the company's chief executive, said in a conference call. "We're part of this macro phenomenon, but we don't take too much comfort in that. ... We're not hiding behind what's happening to every other card issuer in this country."

Advanta's small-business losses, which previously had been below-average according to surveys in which the company took part, have accelerated and are now average, Mr. Alter said.

"We're aware of it and are working to slow the pace and begin to reduce it," he said. "We've redirected our best and brightest" employees and are "focused brutally" on addressing the losses.

Advanta intends to sign up "substantially fewer" customers this year than last, and is sending some operations offshore in order to reduce costs, Mr. Alter said.

The company plans to reject or give smaller lines to applicants with "certain profiles ... where we would project higher losses," he said. "We've also closed accounts and cut lines ... where we see performance inconsistent with what we would have expected."

Philip M. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

1Q Earnings: Small Business Woes Continue to Affect Advanta
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.