Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kartik Mehta – FTN Midwest Research Securities.
Kartik Mehta – FTN Midwest Research Securities
Dave I better wanted to understand the earnings power of the company. I know you said there is a lot of inputs and outputs here this quarter and that makes it a little bit difficult so I just wanted to see if you could maybe give where you think the earnings part of the company is. I know the margins have yet to be reset because of some of these new contracts. Maybe if you could talk about that a little bit?
David Parrin
I think one of the things that we really want to get focused on here is the money transfer business. I think as you look through the earnings release and the 10-Q that will get filed you will see when you take some of the noise out the tremendous accomplishment we have had in there and quite frankly I think that really is what this business is about.
We are not providing any guidance at this point just given the significant changes in our overall operation particularly on the payment systems side. Until we actually get this re-pricing through and see what the impact of that is on the balances I think it is really tough to provide any forecast on that.
I will tell you that clearly, and we talked about as part of this restructuring process, we really are focused on repositioning the portfolio reducing the types of assets in there and consequently the yield. So we really have shifted our focus over to managing that cost of funds if you will, the commission we pay to the banks. That is really where we see the spread coming from is by reducing that cost of funds. But we have to let some of this work its way through the system before we get a really strong handle on that.
Phillip Milne
I think we just continue to be so excited about the money transfer business and the results that we got in the first quarter and we continue to see robust growth in that business so we are going to put a tremendous amount of energy behind growing the MoneyGram franchise on a global basis.
Kartik Mehta – FTN Midwest Research Securities
Could you talk about what you think would happen to margins in the Global Funds Transfer business? I know you used to provide that data and I didn’t see it this time around. Maybe you could talk about what is happening to those margins as some of these large agents are re-pricing.
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