MasterCard's profits boost

MASTERCARD, the world's second largest credit card network, reported better-then-expected quarterly profits yesterday as it raised fees charged to banks and cut expenses.

Visa, the company's larger rival, had reported better-than-expected quarterly profits on Wednesday, after cutting back on its costs.

But Robert Selander, MasterCard's chief financial executive, said the downturn in consumer spending would make it difficult for the company to meet its revenue targets during 2009-11.

"We don't expect the economic slowdown across the world will improve until sometime next year," Selander said.

MasterCard's second-quarter net income was $349 million (212m), compared with a loss of $747m a year earlier.

Net revenue rose by 2.7 per cent to $1.3 billion, boosted by higher fees charged to banks and increased consumer use of credit and debit cards.

But those gains were partly offset by the strengthening dollar, particularly against the euro and the Brazilian real.

Martina Hund-Mejean, MasterCard's chief financial officer, predicted that the US economy will show some "very, very small" growth in 2010, but that the economic recovery could take more time in Europe.