MasterCard fell the most in almost 2½ years after reporting profit that missed analysts' estimates as rebates to card issuers fuelled a jump in expenses.

The second-largest US payments network slid 5.2 per cent yesterday after tumbling as much as 10 per cent, the biggest intraday decline since August 2011. Operating expenses rose 11 per cent to $1.1 billion from a year earlier, the firm said. Rebates were "even higher than expected", Jason Kupferberg, an analyst at Jefferies Group said in a note to clients. "We view the pullback as an especially good buying opportunity."

Chief executive officer Ajay Banga (54) is upgrading technology as MasterCard competes with the larger Visa for deals with card-issuing banks.

The expense increase “was primarily driven by higher investments in people and marketing to support strategic initiatives,” according to the firm’s statement. Profit excluding one-time items was 57 cents a share, missing the 60-cents average estimate of 29 analysts surveyed by Bloomberg.

Fourth-quarter net income rose 3 per cent to $623 million from $605 million, MasterCard said. – (Bloomberg)