Citibank North America branded credit card profits declined 19.0% and Citi retail cards declined 5.5% year-on-year (YOY) in the fourth quarter (4Q/15). Citi branded cards continue to experience no growth in outstandings and impacted by increased acquisition and rewards costs.
EOP outstandings declined 0.4% YOY from $67.5 billion one-year ago to $67.2 billion for 4Q/15 and compared to $64.8 billion in the prior quarter.
Purchase Dollar Volume (PDV) rose 8.6% YOY to $49.0 billion for 4Q/15, compared to $46.6 billion in the prior quarter and $45.1 billion in 4Q/14.
North America branded credit card accounts declined 0.4% from 23.6 million one-year ago to 23.5 million for 4Q/15.
Early stage delinquency (30-89 days) was flat at 0.78% sequentially,
and down six basis points (bps) from 4Q/14.
Late stage delinquency (90+ days) increased four bps from 3Q/15 to 0.80%, but down nine bps from the year ago quarter.
Charge-offs rose four bps from the prior quarter to 2.79%, but down 31 bps from 4Q/14/
The average yield declined slightly YOY, but increased from 3Q/15. For 4Q/15 the yield was 10.31%, compared to 10.28% in the prior quarter and 10.35% one-year ago. (Average yield is calculated as gross interest revenue earned divided by average loans.)
NORTH AMERICA CITI-BRANDED CARD INCOME
4Q/14: $636 million
1Q/15: $539 million
2Q/15: $499 million
3Q/15: $522 million
4Q/15: $515 million
NORTH AMERICA CITI-RETAIL CARD INCOME
4Q/14: $361 million
1Q/15: $404 million
2Q/15: $379 million
3Q/15: $397 million
4Q/15: $341 million
North America Global Consumer Banking (GCB) revenues of $4.8 billion decreased 6%, with lower revenues in Citi-branded cards, Citi retail services and retail banking. Citi-branded cards revenues of $1.9 billion decreased 9%, reflecting the continued impact of lower average loans as well as increased acquisition and rewards costs. Citi retail services revenues of $1.6 billion declined 1%, largely reflecting the continued impact of lower fuel prices on loan growth and purchase sales. Retail banking revenues declined 6% to $1.3 billion. Excluding a $130 million gain on the sale of a mortgage portfolio in the prior year period, retail banking revenues increased 4%, reflecting 7% growth in average loans, 9% growth in average checking deposits and improved deposit spreads.
North America GCB net income was $1.0 billion, down 13%, 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% to $2.4 billion, primarily driven by ongoing efficiency savings and lower repositioning expenses.
North America GCB credit quality continued to improve as net credit losses of $914 million decreased 10%. Net credit losses improved versus the prior year period in Citi-branded cards (down 12% to $454 million) and in Citi retail services (down 10% to $418 million). The net loan loss reserve release in the fourth quarter 2015 was
$63 million, $181 million lower than in the prior year period, as credit continued to stabilize.
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