Five of the top consumer finance companies made the Stable Rating Outlooks for this year. FitchRatings says the key ingredients are strong franchises and leading market positions, continued strong credit performance, appropriate risk-adjusted capital levels and increasingly diverse funding profiles.
The nation’s second largest Visa and MasterCard issuer continues to struggle with sluggish outstandings (like #1 Chase) and purchase volume growth, but credit card issuance remains strong. Forecaster RAM Research projects Bank of America (BofA) will post $88.0 billion in outstandings and $50.2 billion in PDV for the first quarter.
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.
Bank of America (BofA) reported a decline of 0.8% in Year-on-Year (Y/Y) average U.S. bank credit card outstandings of $88.4 billion for the fourth quarter (Q4/14). Meanwhile, 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
Bank of America (BofA) reported a decline of 1.2% in Year-on-Year (Y/Y) average U.S. bank credit card outstandings of $88.9 billion for the third quarter (Q3/14). Meanwhile, Purchase Dollar Volume (PDV) for BofA’s U.S. bank credit cards rose 1.9% Y/Y and flat Quarter-to-Quarter (Q/Q) to $53.8 billion.
One of the most important and widely accepted card profit metrics is to “risk-adjust”‘ top line revenue. This is defined as the total revenue yield (all fees and interest) less loan losses. The trend recently has been greatly improving and very instructive.
The bank credit card business is back, now humming on all cylinders after going through a terrible 2009 and 2010 with massive losses. Chase Card Services, the biggest U.S. player, posted Q2 net revenue as a percentage of average loans of 12.15%, compared with 12.59% in the prior year and 12.22% in the prior quarter.
BofA reported a decline of 1.8% in Year-on-Year (Y/Y) average U.S. bank credit card outstandings of $88.1 billion. Meanwhile, PDV for BofA’s U.S. bank credit cards jumped 3.9% Y/Y and 9.6% Q/Q to $53.6 billion. BofA noted its U.S. debit card PDV also increased 2.7% Y/Y and 5.5% Q/Q to $69.5 billion. Also, BofA benefited greatly in Q2/14 from record low delinquency and charge-offs in its U.S. bank credit card portfolio.
Fico announced The Fair Isaac Advisors P&L Insight Service, giving financial services organizations an analysis of their portfolio trends and profit drivers, along with portfolio-level profitability forecasts and what-if scenarios for strategic planning purposes.Unlike traditional P&L assessments, the P&L Insight Service examines potential impacts across the credit lifecycle, including marketing, originations, customer management and collections. FICO’s advisors can rapidly generate actionable insights using a proprietary FICO tool with built-in forecasting models that can be tuned to the particular dynamics of a bank’s portfolio. Advisors convert 12 to 24 months of portfolio-level data into coherent business intelligence, provide automated trend analysis of profit drivers, deliver actionable and quantifiable recommendations, and assist with strategic planning activities for short-, medium-, and long-range objective-setting.
Bill Gates said, “We had to reinvent ourselves entirely as a company at least three times over the years.” Given the annual investment in R & D going on inside Microsoft, imagine what that means for the rest of us trying to innovate and stay viable for the long haul. Where’s our investment in the…
Prosper.com, a peer-to-peer lending marketplace for personal loans and investments, announced today that its rapid growth has continued through early 2012 and concurrently, the company has made several leadership changes and additions to better serve the quickly expanding P2P lending market. Chris Larsen has moved from the role of CEO and Chairman to serve exclusively…
In a continuing series of year end card trend reports, card advisor R.K. Hammer has issued their findings for the most recent reporting period that indicate card industry revenue is up – not total revenue, but the more important “Risk-Adjusted Revenue” (RAR). Total revenue is good, but risk-adjusted is better. Company Founder and CEO Bob…