Barclays on Financial Services: November Credit Card Trust Data Preview
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Barclays on Financial Services: November Credit Card Trust Data Preview
Barclays anaylst, Mark C. DeVries, "On Thursday, credit card issuers will report master trust data for November, which we expect to reveal continued improvement in credit trends across the top six issuers, though we expect the improvements to be relatively modest as both NCOs and delinquencies are near cyclical lows and should follow seasonal patterns more closely. Overall, we expect delinquencies to be flat or rise slightly for Capital One (NYSE: COF) and JPMorgan (NYSE: JPM), and decline for AmEx (NYSE: AXP), ADS, Bank of America (NYSE: BAC, Citi (NYSE: C) and Discovery Financial (NYSE: DFS) with only COF and Alliance Data's (NYSE: ADS) delinquencies changing by more than 2 bps. In November, we would typically expect delinquencies to increase 1-3 bps based on seasonal trends, as some consumer weakness is offset by receivables growth from holiday spend. Based on the Fed's H.8 data, credit card balances grew 1.6% from October 26 to November 30, which should lead to a positive denominator effect on credit ratios. For NCOs, we expect sequential improvement for all issuers except a modest increase for COF (+5 bps)."
Our estimates for each issuer's November delinquencies and NCOs are:
AXP: Managed NCOs down 10 bps to 2.2%, trust NCOs down 8 bps to
2.17%. Managed delinquencies flat at 1.5% rounded; trust delinquencies down 1 bp to 1.64%.
BAC: NCOs down 8bps to 5.90%; delinquencies down 1bp to 3.96%.
C: NCOs down 16 bps to 5.50%; delinquencies down 1bp to 3.25%.
COF: NCOs - managed U.S. card up 4bps to 4.00%, trust up 6 bps to 3.45%. Delinquencies - managed U.S. card up 5 bps to 3.78%, trust up 5bps to 3.50%.
DFS: NCOs down 8 bps to 3.18%; delinquencies down 2 bps to 2.46%
JPM: NCOs down 1bp to 4.17%; delinquencies flat at 2.55%
ADS: NCOs - managed roughly flat at 6.3%. Delinquencies - managed down 16 bps
to 4.6%
Barclays anaylst, Mark C. DeVries, "On Thursday, credit card issuers will report master trust data for November, which we expect to reveal continued improvement in credit trends across the top six issuers, though we expect the improvements to be relatively modest as both NCOs and delinquencies are near cyclical lows and should follow seasonal patterns more closely. Overall, we expect delinquencies to be flat or rise slightly for Capital One (NYSE: COF) and JPMorgan (NYSE: JPM), and decline for AmEx (NYSE: AXP), ADS, Bank of America (NYSE: BAC, Citi (NYSE: C) and Discovery Financial (NYSE: DFS) with only COF and Alliance Data's (NYSE: ADS) delinquencies changing by more than 2 bps. In November, we would typically expect delinquencies to increase 1-3 bps based on seasonal trends, as some consumer weakness is offset by receivables growth from holiday spend. Based on the Fed's H.8 data, credit card balances grew 1.6% from October 26 to November 30, which should lead to a positive denominator effect on credit ratios. For NCOs, we expect sequential improvement for all issuers except a modest increase for COF (+5 bps)."
Our estimates for each issuer's November delinquencies and NCOs are:
AXP: Managed NCOs down 10 bps to 2.2%, trust NCOs down 8 bps to
2.17%. Managed delinquencies flat at 1.5% rounded; trust delinquencies down 1 bp to 1.64%.
BAC: NCOs down 8bps to 5.90%; delinquencies down 1bp to 3.96%.
C: NCOs down 16 bps to 5.50%; delinquencies down 1bp to 3.25%.
COF: NCOs - managed U.S. card up 4bps to 4.00%, trust up 6 bps to 3.45%. Delinquencies - managed U.S. card up 5 bps to 3.78%, trust up 5bps to 3.50%.
DFS: NCOs down 8 bps to 3.18%; delinquencies down 2 bps to 2.46%
JPM: NCOs down 1bp to 4.17%; delinquencies flat at 2.55%
ADS: NCOs - managed roughly flat at 6.3%. Delinquencies - managed down 16 bps
to 4.6%
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