Moneygram International Inc.
), has renewed its contract with leading Vietnam-based bank,
Vietcombank. Following the news, the company's shares rose 0.8% (or
13 cents) to close at $16.45 yesterday.
Per the renewed contract, the people of Vietnam will now be able
to send and receive funds, contrary to the earlier contract which
only permitted receiving money. These services will be available
across 400 outlets of Vietcombank.
As per the estimates of the World Bank, roughly $9.2 billion was
remitted to Vietnam in 2011. Vietnam has one of the highest
remittances primarily because a majority of its population, which
lives, studies, travels and works abroad, needs to send and receive
money to and from their families.
This follows MoneyGram's recent agreement with Banco Ganadero to
make its money transfer services available across 600 locations in
Bolivia. Also, earlier this month, MoneyGram renewed its contract
with Advance America, a financial service provider and a unit of
leading Mexican bank, Grupo Elektra SA, for the next five years. Of
late, the company has been renewing several contracts with the
clear intention of augmenting its core products.
MoneyGram reported second-quarter 2012 earnings per share of 23
cents, in line with the Zacks Consensus Estimate. Higher money
transfer transaction volumes and higher fee and other revenues
drove the top line, while absence of preferred dividend payouts,
lower interest expenses helped the bottom line and margin expansion
in the quarter.
MoneyGram's closest competitor,
Western Union Co.
), also shares the company's aggressive stance towards expanding
its services both organically and inorganically. Both companies
hold a short-term Zacks #3 Rank (Hold). We also have a long-term
Neutral recommendation on the shares of both MoneyGram and Western
MONEYGRAM INTL (MGI): Free Stock Analysis
WESTERN UNION (WU): Free Stock Analysis Report
To read this article on Zacks.com click here.