Providian Financial Corp. had first quarter 2002 net income of $10 million, down from $230.5 million one year ago. The company’s revenue rose from $1.66 billion to $2.04 billion.
During the quarter the company underwent a significant restructuring. It sold $2.6 billion in higher risk assets to a consortium headed by Goldman, Sachs & Co, Salomon Smith Barney, CardWorks Inc. and CompuCredit Corp. Providian took a $240 million loss on the sale. The quarter ended March 31.
It also sold its Providian Master Trust operation, which included $8 billion in credit card loans made on 3.3 million accounts, to JP Morgan Chase. Providian realized $242 million on that sale.
Staff cuts involving 800 people caused the company to take a $17 million charge during the quarter.
San Francisco-based Providian trimmed its marketing and solicitation budget from $144.6 million a year ago to $108.7 million in the quarter just ended. The company did not detail where the cuts were made.
At the end of the quarter, Providian managed $22.13 billion in credit card loans on 15 million accounts, and $10 million in home loans. At the end of first-quarter 2001, it managed $28.11 billion in credit card loans and $12 million in home loans.
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