We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Card Issuers' Delinquencies Down, Charge-Offs Up in February
Read MoreHide Full Article
The U.S. credit card delinquency rates declined in February 2021 for major issuers amid the coronavirus-induced economic slowdown. However, the number of credit card loans that are charged off after consumers are delinquent on numerous payments and a bank determines that the loans won't get repaid increased.
Details
Bank of America’s (BAC - Free Report) delinquencies declined to 1.50% in February from January’s 1.55%, while charge-off rate of 2.67% was up from 1.81%.
Also, JPMorgan’s (JPM - Free Report) delinquency rate was 0.97% compared with the prior month’s 0.99%. However, its rate of losses on credit card loans rose 14 basis points (bps) in February to 2.11%. Likewise, another major credit card issuer, Capital One’s (COF - Free Report) charge-off rate increased to 2.66% from 2.54% in January, while delinquency rate declined 4 bps to 2.45%.
Similarly, for Citigroup (C - Free Report) credit card charge-off rate increased 75 bps to 2.76% in the reported month, while its delinquency rate fell 7 bps from the prior month to 1.31%.
Further, Synchrony Financial’s (SYF - Free Report) adjusted charge-off rate rose to 4.00% in February from January’s 3.10%, while core delinquencies declined 10 bps to 3.10%. Moreover, Discover Financial’s (DFS - Free Report) delinquency rate decreased to 2.01% in the reported month from 2.08% in January, while its charge-off rate grew 58 bps to 3.15%.
On the other hand, American Express’ (AXP - Free Report) rate of delinquencies remained steady at 1.00% in February. Yet, rate of charge-offs of 1.40% was up 10 bps from the prior-month level.
Our Take
The new stimulus payments are on the way to bank accounts and economic recovery is likely to occur at a fast pace. Thus, the chances of a substantial rise in net charge-offs and delinquency rates are less in the near term. This will offer support to banks’ asset quality to a great extent this year.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Card Issuers' Delinquencies Down, Charge-Offs Up in February
The U.S. credit card delinquency rates declined in February 2021 for major issuers amid the coronavirus-induced economic slowdown. However, the number of credit card loans that are charged off after consumers are delinquent on numerous payments and a bank determines that the loans won't get repaid increased.
Details
Bank of America’s (BAC - Free Report) delinquencies declined to 1.50% in February from January’s 1.55%, while charge-off rate of 2.67% was up from 1.81%.
Also, JPMorgan’s (JPM - Free Report) delinquency rate was 0.97% compared with the prior month’s 0.99%. However, its rate of losses on credit card loans rose 14 basis points (bps) in February to 2.11%. Likewise, another major credit card issuer, Capital One’s (COF - Free Report) charge-off rate increased to 2.66% from 2.54% in January, while delinquency rate declined 4 bps to 2.45%.
Similarly, for Citigroup (C - Free Report) credit card charge-off rate increased 75 bps to 2.76% in the reported month, while its delinquency rate fell 7 bps from the prior month to 1.31%.
Further, Synchrony Financial’s (SYF - Free Report) adjusted charge-off rate rose to 4.00% in February from January’s 3.10%, while core delinquencies declined 10 bps to 3.10%. Moreover, Discover Financial’s (DFS - Free Report) delinquency rate decreased to 2.01% in the reported month from 2.08% in January, while its charge-off rate grew 58 bps to 3.15%.
On the other hand, American Express’ (AXP - Free Report) rate of delinquencies remained steady at 1.00% in February. Yet, rate of charge-offs of 1.40% was up 10 bps from the prior-month level.
Our Take
The new stimulus payments are on the way to bank accounts and economic recovery is likely to occur at a fast pace. Thus, the chances of a substantial rise in net charge-offs and delinquency rates are less in the near term. This will offer support to banks’ asset quality to a great extent this year.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>