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Card Issuers' Delinquencies & Charge-Offs Decline in April

The U.S. credit card delinquency as well as charged off rates declined in April 2021 for all major issuers. The trend seems to be driven by the huge stimulus package and tax refunds. These are enabling customers to remain current on their payments.

Details

Bank of America’s BAC delinquencies declined to 1.17% in April from March’s 1.31%, while charge-off rate of 2.33% was down from 3.17%. Also, JPMorgan’s JPM delinquency rate of 0.78% fell from the prior month’s 0.89%. Further, its rate of losses on credit card loans decreased 6 basis points (bps) in April to 1.97%.

Likewise, another major credit card issuer, Capital One’s COF charge-off rate inched down to 2.40% from 2.41% in March, while delinquency rate fell 32 bps to 1.92%. Similarly, for Citigroup C credit card charge-off rate decreased 42 bps to 2.07% in the reported month, while its delinquency rate fell 14 bps from the prior month to 1.12%.

Further, Synchrony Financial’s SYF adjusted charge-off rate was down 10 bps to 3.70% in April. Also, the company’s core delinquencies declined 40 bps to 2.40%.

Moreover, Discover Financial’s DFS delinquency rate decreased to 1.69% in the reported month from 1.85% in March, while its charge-off rate fell 16 bps to 2.55%. Additionally, American Express’ AXP rate of delinquencies and charge off rates were down 10 bps each to 0.80% and 1.00%, respectively.

Our Viewpoint

With the stimulus payments and economic recovery continuing to help consumers in lowering their credit card debts, there is less chance that net charge-offs and delinquency rates will rise substantially in the near term. Thus, this will keep supporting banks’ asset quality to a great extent.

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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
Bank of America Corporation (BAC) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
Capital One Financial Corporation (COF) : Free Stock Analysis Report
 
American Express Company (AXP) : Free Stock Analysis Report
 
Discover Financial Services (DFS) : Free Stock Analysis Report
 
Synchrony Financial (SYF) : Free Stock Analysis Report
 
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