Friday, April 16, 2010

Sikh to take top post at MasterCard

Banga to take top post at MasterCard


In this undated photo provided by Mastercard, President and Chief Operating Officer, Ajay Banga, left, and CEO Robert W. Selander, are shown. Banga will take over as CEO in July.(AP Photo/Mastercard)

PURCHASE, N.Y. -- MasterCard said its president and chief operating officer will take over the company's top job and announced Monday that CEO Robert W. Selander will retire at the end of the year.

Ajay Banga, 50, becomes CEO in July.

During a press conference Monday, Banga said his focus will be on MasterCard's global growth. MasterCard, based in Purchase, N.Y., generates 55 percent of its revenue outside of the U.S.

He said by emphasizing local markets, the payments processor can take advantage of its worldwide reach. "Local presence and local thinking is the best way to ensure your ability to grow while you leverage global scale," Banga said.

Banga was part of a leadership shake up at Citigroup last year, where he had worked for 13 years. He left the bank in June, following chief financial officer Gary Crittenden, who left the month before.

New York-based Citigroup, a major lender in the subprime market, was rocked as the housing bubble burst and the recession took hold.

Bana was brought to MasterCard for the top job.

Banga's original contract with MasterCard allowed him to leave the company with a $4.2 million signing bonus if it failed to offer him promotion to CEO before June 30.

"The news should come as no surprise," wrote Janney Capital Markets analyst Thomas C. McCrohan, noting the contract provisions. He called Banga "an overall highly seasoned executive with broad consumer financial services experience around the globe."

Banga had headed Citigroup's Asia Pacific division.

Beyond its core business of debit, credit and prepaid cards, Banga said Monday that he sees e-commerce and mobile commerce as key components of MasterCard's future.

The incoming CEO pointed to one example as a model for the types of opportunities ahead: last week's announcement of a deal between MasterCard and NextJump to provide online shopping tailored to a customer's prior spending.

Mobile commerce, particularly smart-phone based money transfers and payments, is another arena he targets for expansion, pointing to pilot projects in local markets around the world that are already under way.

Brazil, China and India are among the markets MasterCard will emphasize, he said.

Selander, 59, will stay on as executive vice chairman and board member until he retires on Dec. 31. He has been the company's CEO since 1997.

MasterCard said in February its fourth-quarter profit rose 23 percent as it raised fees to offset fading credit card use in the U.S. Revenue rose to $1.3 billion, from $1.22 billion a year ago.

Shares of MasterCard Inc. rose 69 cents to close at $259.57 Monday.

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