Among the nation’s top four Visa and MasterCard (V/M) issuers, bank credit card charge-offs are down 48 basis points year-on-year (Y/Y), but up nine basis points quarter-to-quarter (Q/Q). All credit card metrics are seasonally skewed in the first quarter as well as the fourth quarter by a higher denominator in Q4 and a lower denominator in Q1. Nevertheless, bank credit card charge-offs have been marching south throughout 2013.
Chase (JPM) reported Q1 credit card charge-offs of $888 million, versus $1082 million one-year ago and compared to $891 million in the prior quarter. JPM says the credit card net charge-off rate, as a percentage of average loans, was 2.93%, down from 3.55% in the prior year and up from 2.86% in the prior quarter. Average loans of $123.3 billion were flat Y/Y and down 1% Q/Q.
Bank of America (BOFA) reported Q1 credit card charge-offs of $718 million, versus $947 million one-year ago, and compared to $724 million in the prior quarter. The charge-off ratio for the first quarter was 3.25%, an 84 basis points decline from one-year ago. Sequentially, charge-offs edged up by six basis points.
Capital One (COF) posted Q1 domestic credit card charge-offs dropped 42 basis points to 4.01%, compared to Q1/2013. However, compared to the fourth quarter charge-offs increased 12 basis points.
Citibank (CITI) reported Q1 North America credit card charge-offs decreased 50 basis points Y/Y, but up by 11 basis points from the prior quarter. For the first quarter 2014, charge-offs stood at 3.53%, compared to 3.42% for Q4/2013 and 4.03% for Q1/2013.
RAM Research predicts bank credit card charge-offs, among the “Big Four,” will decline 18 basis for the second quarter to 3.23%.
CHASE: Average credit card loans included loans held-for-sale of $315 million, $311 million and $67 million for the three months ended March 31, 2014, December 31, 2013 and September 30, 2013, respectively. These amounts are excluded when calculating the net charge-off rate. There were no loans held-for-sale for the three months ended June 30, 2013 and March 31, 2013.
BANK OF AMERICA: In addition to the U.S. credit card portfolio in the Consumer & Business Banking segment, the remaining U.S. credit card portfolio is reported in the Global Wealth Management segment.
CITIBANK: Average loans, EOP loans and the related consumer delinquency amounts and ratios include interest and fees receivables balances.
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