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Global growth boosts MasterCard 4Q income

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AP

2013-02-01

MasterCard's net income has rebounded strongly in the fourth quarter as its overseas business continue to expand, the company says.

The results benefited by comparison to the year-earlier quarter, which was weighed down by a massive legal charge.

Net income in the three months ended December 31 rose to $US605 million ($A582.94 million), or $US4.86 per share, from $US19 million, or 15 cents per share, a year earlier.

Net revenue rose 10 per cent to $US1.90 billion.

MasterCard continued to grow by most measures - it processed 20 per cent more transactions than a year ago, including 17 per cent higher cross-border volumes.

MasterCard is expanding most quickly in Latin America and the region that includes Asia, the Middle East and Africa.

Outside the United States, the volume of cash moved in 2012 increased 23.5 per cent on a US dollar basis.

That compares with growth of 9.7 per cent inside the US.

The company also has been trying to gain market share in the US credit card market.

To that end, it announced a number of partnerships with big consumer brands, including InterContinental Hotel Group, Bass Pro Shops and Shell Oil.

Strong partnerships will add to MasterCard's dollar volumes, but may take some time to have a visible effect, Chief Financial Officer Martina Hund-Mejean said.

"When you sign an agreement, you have to actually roll out the cards to the consumer in the market, and then you have to get the consumer to use those cards," she said.

She said the company's market share in the US credit card business has barely changed over the last few years.

The company is providing frequent status updates about its growth in this area, Hund-Mejean said.

The Purchase, NY-based payments network took a charge of nearly $US500 million in the year-earlier quarter.

The charge covered the cost of a settlement with retailers over the fees they pay on credit card transactions.

For 2012, MasterCard earned $US2.76 billion, or $US21.94 per share, on revenue of $US7.39 billion.

During the quarter, management repurchased 1.3 million shares for $US613 million.

Repurchasing shares is a way of returning profits to shareholders - it boosts the value of each share that remains in investors' hands.

The quarterly results beat analysts' estimates.

Shares rose $US2.40 to close at $US518.40 on Thursday.