As credit quality improves and purchase volumes slowly improve in most regions, Citigroup Inc.’s credit card operations gradually are regaining steam, although borrowing remains soft.

Fourth-quarter revenue for regional Citi-branded credit card operations, including the U.S., Latin America, Asia and the Europe, Middle East and Africa regions, was flat at $4.09 billion compared with $4.07 billion a year earlier, the company said Jan. 17. Income during the period ended Dec. 31 increased 33.1%, to $857 million from $644 million. Total regional card sales volume rose 5%, to $74 billion from $70.5 billion.

The overall charge-off rate for Citi’s regional credit cards operation fell 268 basis points, to 5.15% from 7.83%, while total card loans at the end of the period declined 0.7%, to $113.3 billion from $114.1 billion. Altogether, Citi had 53.4 million accounts open at end of December, up 4.1% from 51.3 million a year earlier.

Citi’s largest region, North America, once again reaped the positive effects of reducing large loan-loss reserves and bumping up advertising for relatively new products, such as Citi’s “Simplicity” card.”

“We are beginning to see the benefit of our investment spending as card accounts, purchase sales and loans have all stabilized and are now beginning to grow,” John Gerspach, Citi chief financial officer, told analysts Jan. 17 on a call to discuss the company’s quarterly results.

In North America, revenue for Citi-branded cards fell 5%, to $2.1 billion from $2.21 billion, while income rose 123%, to $491 million from $220 million as Citi losses declined sharply. Sales volume rose 2%, to $41.2 billion from $40.4 billion.

The charge-off rate for credit cards in North America declined 348 basis points, to 5.31% from 8.79%. Total loans at the end of the quarter were $73.1 billion, down 2.9% from $75.3 billion. Citi had 22 million open accounts in the region at the end of the quarter, up 4.3% from 21.1 million a year earlier.

Citi’s private-label credit card unit, which the bank plans to return to its core operations during the first quarter from Citi Holdings, saw a similar positive effect from lower losses, although sales volume declined slightly from a year ago.

Revenue from private-label retail cards declined 2.2%, to $1.75 billion from $1.79 billion a year earlier, while income rose 276%, to $327 million from $87 million. Purchase volume declined 1.8%, to $21.5 billion from $21.9 billion.

The charge-off rate for retail cards declined 443 basis points, to 7.28% from 11.71%. Citi had $42.8 billion outstanding loans in its private-label card operation at the end of the quarter, down 7.8% from $46.4 billion a year earlier.

Total private-label accounts fell 5.5%, to 84.2 million from 89.1 million.

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