Citibank North America branded credit card profits declined 16% and Citi retail cards declined 12% year-on-year (YOY) in the third quarter (Q3/15). End-of-Period (EOP) outstandings also slipped 3% and the Citi North America branded card base shrank 1.0% YOY in Q2/15. However, credit quality improved as delinquency and charge-offs declined.
EOP outstandings declined 3% YOY from $66.5 billion one-year ago to $64.8 billion for Q3/15 and compared to $64.5 billion in the prior quarter.
Purchase Dollar Volume (PDV) rose 8% YOY to $46.6 billion for Q3/15, compared to $46.1 billion in the prior quarter and $43.3 billion in Q3/14.
North America branded credit card accounts declined 1% from 23.5 million one-year ago to 23.3 million for Q3/15.
Early stage delinquency (30-89 days) inched up to 0.78%, from 0.72% in Q2/15 and 0.85% one-year ago. Late stage delinquency (90+ days) declined from 0.84% in Q3/14 to 0.76% for Q3/15.
Charge-offs declined both sequentially and annually from 3.19% in the prior quarter to 2.75% in Q3/15.
The yield declined YOY and sequentially. For Q3/15 the yield was 10.28%, compared to 10.39% in the prior quarter and 10.38% one-yea ago.
NORTH AMERICA CITI-BRANDED CARD INCOME
3Q/14: $636 million
4Q/14: $636 million
1Q/15: $539 million
2Q/15: $499 million
3Q/15: $443 million
NORTH AMERICA CITI-RETAIL CARD INCOME
3Q/14: $440 million
4Q/14: $361 million
1Q/15: $404 million
2Q/15: $379 million
3Q/15: $401 million
Source: Citibank; CardData
Citi noted North America Global Consumer Banking (GCB) revenues of $4.8 billion decreased 4% compared to the prior year period, as lower revenues in Citi-branded cards and Citi retail services were partially offset by higher revenues in retail banking. Citi-branded cards revenues of $1.9 billion decreased 9% versus the prior year period, reflecting the continued impact of lower average loans as well as an increase in acquisition and rewards costs. Citi retail services revenues of $1.6 billion declined 2% versus the prior year period, reflecting the continued impact of lower fuel prices and higher contractual partner payments. Retail banking revenues rose 3% from the prior year period to $1.3 billion, reflecting 7% growth in average loans, 7% growth in checking deposits and improved deposit spreads, partially offset by a lower mortgage repurchase reserve release.
North America GCB net income was $1.1 billion, down 10% versus the prior year period, as the decrease in revenues and lower net loan loss reserve releases were partially offset by lower operating expenses and lower net credit losses. Operating expenses declined 6% versus the prior year period to $2.3 billion, primarily driven by ongoing efficiency savings and lower repositioning expenses, partially offset by higher investment spending in Citi-branded cards.
North America GCB credit quality continued to improve as net credit losses of $878 million decreased 14% versus the prior year period. Net credit losses improved versus the prior year period in Citi-branded cards (down 16% to $443 million) and in Citi retail services (down 12% to $401 million). The net loan loss reserve release in the third quarter 2015 was $61 million, $280 million lower than in the prior year period, as credit continued to stabilize.
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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 expenses.