Legal costs hit Mastercard profits

http://news.bbc.co.uk/go/rss/-/1/hi/business/7708097.stm

Version 0 of 1.

Credit card provider Mastercard, has reported a quarterly loss due to a large legal charge.

It lost $194m (£122m) in the third quarter, after paying a $515.5m charge related to an anti-trust settlement with rival Discover Financial Services.

Excluding the charge, Mastercard made profits of $322m, thanks in part to a rise in the number of transactions.

But the global slowdown and a recent strengthening of the US dollar are expected to hit Mastercard next year.

We are planning on a more prolonged downturn rather than something turning around in the next three to six months Martina Hund-Mejean, Mastercard chief financial officer

"We are in an economic crisis like I don't think we have seen in our lifetime," Martina Hund-Mejean, Mastercard chief financial officer, told the Reuters news agency.

"We are planning on a more prolonged downturn rather than something turning around in the next three to six months ... My main concern is how long this is going to last," she added.

Mastercard expects to meet its profit and revenue targets this year, but forecasts a slower revenue growth in 2009 than its long-term target of 12% to 15%.

Settlement

Credit card issuer Discover Financial Services filed an anti-trust lawsuit in 2004 against its rivals Mastercard and Visa.

It claimed the competitors had taken steps to limit its growth.

Last week Mastercard and Visa agreed to pay a combined $2.75bn to settle the lawsuit.