Putin, lashing back against U.S. and EU sanctions over the crisis in
Ukraine, has said Russia needs its own card system to reduce its
reliance on Western companies.
Russia's parliament passed legislation last week that would allow
for the creation of domestic credit and debit cards as well as
require Western card companies to pay a security deposit to operate
in the country.
MasterCard and larger rival Visa Inc <V.N> stopped providing
services to some Russian banks after U.S. President Barack Obama
imposed sanctions on Russia in March.
"There are provisions (in the legislation) there that I believe
would create serious complications for the way that we can operate
in (Russia)," MasterCard Chief Executive Ajay Banga said on a
post-earnings call with analysts on Thursday.
"Russia will be tough to work through," said Banga, a self-described
MasterCard's Russian operations account for just over 2 percent to
its total net revenue, and the company said the sanctions had little
impact on its first-quarter results.
However, a competing card system in the fast-growing Russian market
would likely constrain future growth for both MasterCard and Visa,
Visa said last week that the sanctions were already hurting its card
transaction volumes in Russia and that it expected revenue growth to
slow further this quarter.
MasterCard, whose shares rose as much as 4.3 percent in morning
trading, said its net income rose 14 percent to $870 million, or 73
cents per share, in the quarter. Analysts on average had expected
earnings of 72 cents per share.
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The company also stuck to its forecast of net revenue growth of
between 11 percent and 14 percent between 2013 and 2015.
MasterCard's worldwide purchase volume increased 10 percent in local
currency terms to $759 billion, with much of the growth coming from
Latin America, Asia and Europe.
U.S. purchase volumes rose 9 percent to $268 billion.
Global consumer confidence returned to pre-financial crisis levels
in the first three months of this year, according to a survey by
research company Nielsen, and was at its highest since the first
quarter of 2007.
MasterCard's net revenue rose about 14 percent to $2.18 billion in
the three months ended March 31, beating the average estimate of
$2.14 billion, according to Thomson Reuters I/B/E/S.
The company's shares were up 2.3 percent at $75.26 in early
afternoon trading. Up to Wednesday's close, the shares had fallen
about 11 percent since the start of the year, underperforming the
S&P 500 Index <.INX>, which rose 1.6 percent.
(Reporting by Tanya Agrawal in Bangalore;
editing by Saumyadeb
Chakrabarty and Ted Kerr)
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