Mastercard 4Q15 Earnings Call Notes

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MasterCard’s (MA) CEO Ajay Banga on Q4 2015 Results

Continue to see challenges in many parts of the world, although the US economy seems most resilient

“Moving onto the global economy, we continue to see challenges in many parts of the world. The U.S. economy seems the most resilient and had good growth in both consumer spending and jobs. In Europe, growth is expected to increase at the fastest pace since 2011, although this is at a lower-level, driven by stronger domestic demand and exports. However, several big emerging market economies, China and Brazil being examples, are experiencing either week or slowing growth.”

Chinese tourists are still traveling just to different locations

“what you will find interestingly is not that Chinese tourists are not traveling. They’re traveling to different places. Earlier, instead of going to greater China, Hong Kong, Taiwan, a lot of that, today they’re going more Japan, as an example. Japan has actually seen a surge of 115% in tourist arrivals from China compared to the prior year. So, current direction and location is changing. ”

Domestic spending is certainly impacted in China

“Domestic spending is certainly impacted in China. I was in China last week and you could see it there. So I don’t know that merely winning a few more deals will change the nature of revenue growth trajectory in China over the course of one year. Over the course of a couple years, absolutely. It can help. But I wouldn’t assume that China’s revenue growth will be exactly as it used to be just given the amount of economic change that is going on in that country.”

Until sanctions get lifted in Iran we can’t do much

“Now Iran, on the other hand, has the payment system domestically, merchants to accept electronic payments already. It’s not Myanmar in the form of being a completely cash economy. So if you could plug and pay, you could probably get quicker results than in Myanmar but the United States government is still to lift its sanctions. You just saw that the Iranian president came out and signed a fairly large set deals on planes from AirBus — hasn’t even signed anything at Boeing. That is all part of what is going on. There has to be a whole change in the sanctions regime that allows companies like us and our competitors and banks to operate freely in Iran. That has yet to be seen. So I would say Iran more interesting because of a literate population with a relatively functioning electronic payment system. But until the sanctions actually get lifted, this is all very nice but we can’t do very much.”