Citibank’s U.S. bank credit card profits rose 27% year-on-year (Y/Y) and retail credit card profits rose 11% Y/Y in the second quarter of 2014 (Q2/14). End of Period (EOP) bank credit card outstandings declined 3% Y/Y, while purchase dollar volume (PDV) rose 5% Y/Y.
While Citi’s U.S. bank credit card profits of $558 million were up Y/Y, they declined slightly from the prior quarter. Citi’s retail credit card profits of $430 million were likewise up Y/Y, but down 2% sequentially.
U.S. bank credit card profits were driven by record low delinquency and charge-offs coupled with rising PDV and higher net credit margin, according to CardData.
Q2/14 U.S.bank credit card revenues of $2028 million were up 3% Y/Y and retail credit card revenues rose 7% Y/Y to $1581 million.
Citi’s bank credit card portfolio ended Q2/14 with $67.3 billion in outstandings and $66.4 in average outstandings for the quarter. PDV for the second quarter was $43.8 billion. Citi ended the second quarter with 24.1 million U.S. bank credit card accounts, up 2% Y/Y.
Citi’s total delinquency rate, as a percentage of EOP outstandings, declined 20 basis points (bps) from the prior quarter to 1.67% and dipped 14 bps from the year ago quarter. Recent delinquency of 30-89 days stands at 0.80%, compared to 0.90% in Q1/14 and 0.85% in Q2/13. Older delinquency of 90+ days likewise declined to 0.87% in Q2/14, compared to 0.97% in the prior quarter and 0.87% in the year ago quarter.
Charge-offs, as a percentage of average loans, continued to decline to 3.44% for Q2/14, down 9 bps sequentially and 46 bps Y/Y.
Net credit margin, as a percentage of average loans, rose sharply Y/Y to 8.78%, compared to 8.57% in the prior quarter and 7.68% in Q2/13. Average yield of 10.31%, rose 20 bps Y/Y but dropped 8 bps from Q1/14. Net interest revenue of 9.88% was likewise up Y/Y but down sequentially.
RAM Research projects Citi’s U.S. bank credit card profits will decline slightly in the third quarter to $549 million.
*RESOURCES:*
For more data on Citi’s Bank Credit Card Portfolio access CardData®. For information and commentary on Citi’s Bank Credit Card Portfolio visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. Custom RAM Research® projects on Citi’s Bank Credit Card Portfolio are available exclusively through CardWeb.com.®
*NOTES:*
Average loans, EOP loans and the related consumer delinquency amounts and ratios include interest and fees receivables balances.
Average yield is calculated as gross interest revenue earned divided by average loans.
Net interest revenue includes certain fees that are recorded as interest revenue.
Net credit margin represents total revenues, net of interest expense, less net credit losses and policy benefits and claims.
