2023-07-30 16:35:00 ET
Overall, credit card metrics for U.S. credit card issuers held up well in June. And while some companies, especially Bread Financial ( NYSE: BFH ), saw delinquency and net charge-off rates essentially back to prepandemic levels, others are still seeing fewer late payments and lower charge-offs than in the before times.
On average, credit card delinquency rates ticked up 2 basis points in June from May, while average net-charge offs declined month-to-month as seen in the table below.
When comparing against June 2019, delinquency rates at American Express ( NYSE: AXP ), Citigroup ( NYSE: C ), and Bank of America ( NYSE: BAC ) all still remain at least 30 basis points lower. JPMorgan ( NYSE: JPM ), down 25 bps from June 2019, is the only one with a delinquency rate under 1%.
For net charge-offs, four card issuers have rates that are at least 80 bps lower than their June 2019 levels — JPMorgan ( JPM ), Synchrony ( NYSE: SYF ), Citigroup ( C ), and Bank of America ( BAC ).
As usual, Discover Financial ( NYSE: DFS ) isn't in this month's table because it doesn't report monthly credit card metric data for the last month of each quarter. That will be included in its July data. In Q2 results , Discover said credit card net principal charge-off rate increased to 3.68% from 3.10% in Q1 2023 and exceeding 3.49% in Q2 2019. Its 30+day delinquency rate rose to 2.86% from 2.76% in Q1 and from 2.34% in Q2 2019.
How do investors feel about the stocks? For the pure-play credit card stocks, most have failed to keep up with the broader S&P 500 Index year-to-date. The best-performing name, Capital One ( NYSE: COF ) has gained 23%, beating SPY's 20% showing. Bread Financial ( BFH ), the name with the higest levels of delinquencies and charge-offs, turned in the worst performance, rising only 3.9%.
A month on its own doesn't tell the whole story. Looking at longer term quarterly data, Capital One ( COF ) and Discover Financial ( DFS ) have roughly reverted to more normal credit trends .
2023 | ||||||||
Company | Ticker | Type | June | May | April | 3-month average | June 2019 | Change in bps |
Capital One | COF | delinquency | 3.74% | 3.64% | 3.57% | 3.61% | 3.40% | 34 |
charge-off | 4.38% | 4.50% | 4.26% | 4.38% | 4.55% | -17 | ||
American Express | AXP | delinquency | 1.10% | 1.10% | 1.10% | 1.10% | 1.40% | -30 |
charge-off | 1.80% | 1.60% | 1.50% | 1.55% | 2.20% | -40 | ||
JPMorgan | JPM | delinquency | 0.88% | 0.85% | 0.87% | 0.86% | 1.13% | -25 |
charge-off | 1.60% | 1.60% | 1.58% | 1.59% | 2.42% | -82 | ||
Synchrony | SYF | delinquency | 3.80% | 3.80% | 3.70% | 3.75% | 4.00% | -20 |
adjusted charge-off | 4.70% | 4.90% | 4.70% | 4.80% | 5.50% | -80 | ||
Bread Financial | BFH | delinquency | 5.50% | 5.50% | 5.50% | 5.50% | 5.20% | 30 |
charge-off | 7.70% | 8.40% | 7.80% | 8.10% | 5.80% | 190 | ||
Citigroup | C | delinquency | 1.17% | 1.15% | 1.14% | 1.15% | 1.51% | -34 |
charge-off | 1.76% | 2.06% | 1.99% | 2.03% | 2.56% | -80 | ||
Bank of America | BAC | delinquency | 1.20% | 1.15% | 1.17% | 1.16% | 1.56% | -36 |
charge-off | 1.90% | 1.95% | 1.89% | 1.92% | 2.71% | -81 | ||
Avg. delinquency | 2.48% | 2.46% | 2.44% | 2.46% | 2.60% | -12 | ||
Avg. charge-off | 3.41% | 3.57% | 3.39% | 3.46% | 3.68% | -27 |
More on Credit Card Stocks:
- SA Quant, SA Analyst, and Wall Street ratings on credit card stocks
- Capital One Financial: Limited Upside (Rating Downgrade)
- Citigroup: Still Not Getting The Respect It Deserves - Shares Cheap
- Discover Financial: Don't Fall for the Value Trap
- American Express stock slips on concerns of revenue growth decelerating
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Credit card delinquencies tick up, net charge-offs fall in June