MBNA shares down

NEW YORK – MBNA Corp., the world’s third largest issuer of Visa and MasterCard credit cards, said soured loans climbed last month, prompting several Wall Street analysts to reduce their profit forecasts, while investors unloaded shares.

MBNA shares closed 12 percent lower on the news Wednesday at $14.50, down $2, on the New York Stock Exchange.

In a regulatory filing Tuesday, MBNA said total managed charge-offs – which includes loans held for securitization, loan portfolio and securitized loans – rose 0.41 percentage point to 5.59 percent as of Jan. 31, compared with the prior month. Meanwhile, total managed delinquencies rose 0.12 percentage points to 5.02 percent.

The news follows a disappointing earnings report last month, when the Wilmington, Del., company said it would boost the amount of money set aside for bad loans because of an accounting change within its consumer-finance portfolio. Essentially, the company boosted its provision to cover 12 months of expected losses, from nine months.

The rise in losses from December to January is typical, the company said in an 8K filing with the Securities and Exchange Commission. However, the weaker economy has also played a role.

Analysts said the rise in problem loans appears to be driven not by MBNA’s credit card division but by consumer lending – which comprises about 10 percent of total loans and are largely unsecured lines of credit directly marketed to customers.

MBNA management said it expects net credit losses to decline in the second half of 2003, according to an SEC filing from late Tuesday.