Fitch: U.S. Credit Card Metrics Decline Slightly

NEW YORK–(BUSINESS WIRE)–U.S. credit card ABS 60+ delinquencies and chargeoffs retreated from
previous record lows, according to the latest monthly index results from
Fitch Ratings.

After remaining below 1% for the past six months, Fitch’s Prime ended
its historic streak as the index rose to 1.01% for the month of
November, which is well below the historical high of 4.54% reached in
December 2009. Fitch’s Prime Credit Card Chargeoff Index rose from its
record low of 2.43% in October to 2.54% but remains 2.3% lower
year-over-year and nearly 45% lower than the index high from September
2009. After improving for the past two months, Fitch’s Prime Monthly
Payment Rate (MPR) index retreated to 28.51% from 29.69% in October.

The Conference Board Consumer Confidence Index increased significantly
for the month of November, reaching 107.1 up from 100.8 for the month of
October. Consumer’s optimism about current market conditions and short
term outlook pushed the index higher and it now stands at its highest
value since July 2007. Third-quarter GDP was revised up to 3.2% from
2.9%. The labor market continues to track near record lows, with
four-week average jobless claims at 251,000 for the week of Nov. 19,
which is 2,000 lower than the month of October according to the Bureau
of Labor Statistics. The strong labor market bodes well for U.S. Credit
Card ABS performance heading into the final months of 2016.

Fitch’s Prime Credit Card Gross Yield Index rose for the second straight
month to 19.14%. Fitch’s Prime Credit Card Three-Month Excess Spread
Index held steady this month, decreasing just one basis-point to 13.93%.

Fitch’s Prime Credit Card Index was established in 1991 and tracks
approximately $140.4 billion of prime credit card ABS backed by over
$220.8 billion of principal receivables. The index is primarily composed
of general purpose portfolios originated by institutions such as Bank of
America, Citibank, Chase, Capital One, Discover, etc.

Retail credit card metrics retreated this month, as both chargeoff and
60+ delinquencies rose while gross yield fell. Fitch’s Retail Credit
Card Chargeoff Index increased for the third straight month to 6.71%;
the index is 3.87% higher YOY. Fitch’s Retail 60+ Day Delinquency Index
continues to rise, increasing for the third month to 2.63%. The index
stands at its highest value since December 2014. Fitch’s Retail Credit
Card MPR Index decreased to 15.52% for the month of August. Fitch’s
Retail Credit Card Gross Yield Index fell two bps to 29.34%. Fitch’s
Three-Month Average Excess Spread Index improved for the third month in
a row to 19.49%, a new historical record.

Fitch’s Retail Credit Card Index was established in 2004 and tracks
approximately $18.9 billion of retail or private label credit card ABS
backed by over $26.9 billion of principal receivables. The index is
primarily composed of private label portfolios originated and serviced
by Citibank N.A, Synchrony Financial (Formerly GE Capital Retail Bank),
and Comenity Bank (formerly World Financial Network National Bank). More
than 165 retailers are incorporated including Walmart, Sears, Home
Depot, Federated, Lowes, J.C. Penney, L Brands, Bon Ton, and Dillard’s,
among others.

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