-
Consumer credit is showing signs of strength as Americans seek to shrug off the effects of the financial crisis, according to two sets of data released Monday.
July 9 -
Credit card chargeoff rates declined in May, defying the usual seasonal pattern. Loan growth remains elusive.
June 18
Capital One Financial (COF) said Monday that delinquencies in its U.S. credit card portfolio rose slightly in June following four straight months of improvements.
Delinquencies ticked up 8 basis points, to 3.05% from 2.97% in May. Historically, industrywide delinquencies decline by about 2 basis points in June, according to research by Barclays.
But chargeoffs in the domestic card portfolio fell from 4.17% in May to 4.06% in June, McLean, Va.-based Capital One said in a Securities and Exchange Commission filing.
At Discover Financial Services (DFS), the delinquency rate for the company's card portfolio remained steady at 1.6% in June. But Discover's chargeoff rate rose from 2.2% in May to 2.5% in June.
The conflicting signs regarding credit performance come on the heels of a report that said the U.S. card industry is enjoying historically strong repayment rates. In the first quarter of this year, delinquencies on bank-issued credit cards hit a 22-year low, according to data from the American Bankers Association.
At Capital One, there were other more negative signs Monday outside of the domestic credit card realm. The chargeoff rate on the company's auto finance portfolio rose to 1.59% in June, up from 1.25% in May and 1.00% in April. Capital One's international credit card chargeoffs climbed to 5.37% from 4.90% in May.
Capital One's shares were unchanged midday Monday at $66.81, while Discover's shares were down 1.1% to 50.33.
Capital One reports its second-quarter earnings on Thursday; Discover is scheduled to announce its earnings on July 22.
