MasterCard profit beats estimate; stays bullish on China

By Sudarshan Varadhan and Sruthi Shankar (Reuters) - MasterCard Inc reported a better-than-expected quarterly profit and said it would accelerate investments in China, even as concerns mount over slowing growth in the world's second-largest economy. Shares of the world's No. 2 payments network rose as much as 5.6 percent and were set for their best day in five months. The company's profit beat mirrored that of larger rival Visa Inc , which backed its full-year forecast on Thursday. Visa's shares rose as much as 5.2 percent to $72.95. MasterCard is working with China's two top state-held commercial banks to launch their mobile payment products in the country, Chief Executive Ajay Banga said on a conference call. China's decision to open up its $7 trillion bank card market to foreign companies is expected to boost earnings at MasterCard and Visa. MasterCard expects to see double-digit annual growth in credit card transaction volumes in the country, a senior executive told Reuters in November. The company, which operates payments service MasterPass, also plans to increase its digital investments. MasterPass is a digital payments service that enables users to shop online using mobile phones. The company's net income rose to $890 million, or 79 cents per share, in the fourth quarter ended Dec. 31 from $801 million, or 69 cents per share, a year earlier. Analysts on average estimated earnings of 69 cents per share, according to Thomson Reuters I/B/E/S. Net revenue rose 4 percent to $2.52 billion. Gross dollar volume — the total value of transactions made by its customers — rose 12 percent to $1.2 trillion on a local currency basis. Up to Thursday's close of $83.43, MasterCard's stock had lost about 3 percent since the beginning of 2015, underperforming Visa's 5.8 percent gain. (Reporting By Sudarshan Varadhan and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)