The charge-off ratio for the top 100 U.S bank credit cards has been slowing edging upward, rising 10 basis points (bps) in the fourth quarter and 1 bps in the first quarter. RAM Research projects charge-offs will rise to 3.02% for the second quarter.
The average charge-off ratio among the nation’s four largest issuers increased 12 basis points (bps) quarter-to-quarter (QOQ) to 3.09% in the first quarter (Q1/15).
All four of the top issuers reported upticks in their charge-off rates QOQ but remain down significantly from Q1/14. Sequentially, Chase was up 15 bps; Bank of America (BofA) up 13 bps; Capital One (COF) up 16 bps; and Citibank (CITI) up 1 bps.
The Chase charge-off rate increased 15 bps sequentially, but down 9 bps from one-year ago. Chase posted a charge-off rate of 2.84% for Q1/15, compared to 2.69% in Q4/14, and 2.93% for Q1/14.
The BofA charge-off ratio increased 13 bps sequentially, but down 41 bps from one-year ago. BofA posted a charge-off rate of 2.84% for Q1/15, compared to 2.71% in Q4/14, and 3.25% for Q1/14.
The COF charge-off rate increased 16 bps sequentially, but down 46 bps from one-year ago. COF posted a charge-off rate of 3.55% for Q1/15, compared to 3.39% in Q4/14, and 4.01% for Q1/14.
The CITI charge-off ratio increased 1 bps sequentially, but down 31 bps from one-year ago. CITI posted a charge-off rate of 3.11% for Q1/15, compared to 3.10% in Q4/14, and 3.42% for Q1/14.
According to the Federal Reserve, the charge-off rate (not seasonally adjusted) for the top 100 U.S. banks increased to 2.98% in the first quarter.
TOP 100 U.S. BANKS CHARGE-OFF RATIO
(not seasonally adjusted)
Source: Federal Reserve; CardData; RAM Research
For data, background and forecasts on U.S. Credit Card Charge-Offs: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
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