Signet's credit card business taking off

April 27, 1994|By Joel Obermayer | Joel Obermayer,Sun Staff Writer

An article in yesterday's Money section incorrectly reported the subsidiaries of Signet Banking Corp. In fact, Loyola Capital Corp., parent company of Loyola Federal Savings Bank, is an independent, publicly traded company.

The Sun regrets the errors.

Signet Banking Corp.'s credit card business is rocketing ahead and the firm is taking steps to increase the performance of its slower growing core bank, executives told shareholders at the company's annual meeting yesterday in Baltimore.

The Richmond, Va.-based bank's credit card unit more than doubled in size last year and now accounts for more than half its profits. Overall consumer-based business accounted for $2 out of every $3 in profits last year, said company President Malcolm S. McDonald.

FOR THE RECORD - CORRECTION

Signet Banking Corp. is the parent company of both Signet Bank/Maryland and Loyola Capital Corp.

In the first three months of 1994, earnings rose to $53.1 million, a 39 percent increase over the $38.3 million a year ago. During that same period, revenues from credit card operations climbed to $76.5 million, up more than 150 percent from a year ago. Yesterday the stock closed at $41.37, up 87 cents from Monday's close.

But Signet's core business has not fared as well, holding back earnings and stock price growth.

"The performance of the core bank has been subpar," said Chairman and Chief Executive Officer Robert M. Freeman afterward. Part of the blame lies with the bank's real estate portfolio, which was in disarray as recently as three years ago, he said.

But executives maintained that those problems are behind them. They pointed out that nonperforming assets have dropped from $322 million at the end of 1991 to $88 million at the end of the first quarter of 1994.

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