The nation’s second largest issuer, Bank of America (BofA), has slowly recovered from the “Great Credit Meltdown” of 2008-2009. BofA’s End-of-Year (EOY) U.S. credit card outstandings have produced a compound annual growth rate (CAGR) of -8.25% between 2009 and 2013, according to CardData.
After peaking at nearly $150 billion in 2008, BofA’s U.S. card portfolio dipped below $100 billion in 2012 and has been relatively stable since. Last year BofA posted a YOY change of -.05% in U.S. credit card outstandings.
BofA EOY 2014 U.S. outstandings were $91.9 billion, compared to $92.9 billion for EOY 2013 and $129.7 billion for EOY 2010.
Purchase Dollar Volume (PDV) for BofA’s U.S. bank credit cards rose 2.6% Y/Y and up 3.9% Quarter-to-Quarter (Q/Q) to $69.2 billion.
BofA noted its U.S. debit card Q4/14 PDV also increased 1.8% YY and up 1.8% Q/Q to $69.2 billion.
BofA noted credit card issuance remained strong in the fourth quarter. The company issued 1.18 million new credit cards, up 18% from the 1.0 million cards issued in the year-ago quarter. Approximately 67% of these cards went to existing relationship customers during the fourth quarter of 2014.
The 30+ day delinquency rate for U.S. bank credit cardholders declined 40 basis points (bps) from Q4/13 and down 6 bps from the prior quarter. For Q4/14, 30+ day delinquency stood at 1.85%, compared to 1.91% in Q3/14 and 2.25% in Q4/13. The 90+ day delinquency rate also sank by 20 bps Y/Y and up 1 bps Q/Q to 0.94%.
In another good sign, bank credit card charge-offs dropped 68 bps from the year ago quarter to 2.71%. Sequentially, charge-offs declined 8 bps.
BofA reported its gross interest yield rose 10 bps from Q4/13 to 9.26%. The risk-adjusted margin rose 85 bps Y/Y to 9.36%.
Additionally, BofA noted its new Preferred Rewards program continues to expand, resulting in broader and deeper client relationships. Through the end of 2014, approximately 1.2 million clients have enrolled in the program.
BOFA EOY U.S. Outstandings
2010: $129.7 billion
2011: $110.7 billion
2012: $ 94.8 billion
2013: $ 92.3 billion
2014: $91.9 billion
RAM Research projects BofA’s U.S. bank credit card outstandings will be flat throughout 2015.
For more data on BofA’s Bank Credit Card Portfolio access CardData®. For information and commentary on BofA’s Bank Credit Card Portfolio visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. RAM Research® forecasts on BofA’s Bank Credit Card Portfolio are available exclusively through CardWeb.com.®