SYF - Credit card metrics continue to grind lower as forbearance plans end

At the risk of sounding like a broken record, credit card monthly metrics improved again in June, with the average delinquency ("DQ") and net charge-off ("NCO") rates of seven banks falling again as seen in the chart above. Of the individual banks, only Alliance Data's delinquency rate (3.3% vs. 3.2%) and Citigroup's charge-off rate (1.82% vs. 1.79%) increased from May. Both though were still lower than April levels. The vast majority of loans have exited deferral/forbearance status, "yet credit remains benign due to a solid household balance sheet and ongoing stimulus," wrote Jefferies analyst John Hecht in a research note. "We expect NCOs/DQs to continue to deviate from historical patterns, while payment rates remain very high, extending pressure on near-term revenues, though this trend improved M/M," he said. He expects credit trends to remain irregular, saying it might not be until next tax season until they normalize.

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Credit card metrics continue to grind lower as forbearance plans end