Credit card delinquency rate inches toward prepandemic levels in September (NYSE:AXP)

Credit card delinquency rates continued to slowly climb towards prepandemic levels in September, according to the average of seven banks monitored by Seeking Alpha. The average rate of 2.13% rose from 2.05% in August and from 1.89% in July.

For some perspective, though, the average delinquency rate was 2.83% in September 2019, before COVID-19 prompted massive fiscal relief programs that led to the ultra-strong credit measures since then.

The biggest month-over-month jump in delinquency occurred at Bread Financial (NYSE:BFH), which saw a 40 basis point increase to 5.7%, followed by Capital One (NYSE:COF), which saw a 21 bp boost, and Synchrony Financial (NYSE:SYF), with a 20 bp increase.

The average net charge-off rate, though, took a breather from increasing in September. That average rate of 2.09% slipped from 2.13% in August, but was still higher than 2.02% in July. By comparison, the average net charge-off level three years earlier was 3.43%.

The biggest increase in net charge-offs for the month was Capital One (COF), with a 21 bp rise to 2.23%. Meanwhile, charge-off rates fell at three of the banks in the list, with Bread Financial (BFH) seeing its NCO fall 30 bps and Synchrony (SYF) registering a 10 bp dip.

Looking back to 2019, Bread Financial’s (BFH) credit metrics are the closest to its prepandemic level. Delinquency rate of 5.7% in September 2022 compares with 5.9% three years earlier. The NCO rate of 5.0% compares with 5.3% in 2019.

2022
Company Ticker Type September August July 3-month average
Capital One COF delinquency 2.97% 2.76% 2.56% 2.66%
charge-off 2.23% 2.02% 2.36% 2.19%
American Express NYSE:AXP delinquency 0.90% 0.80% 0.70% 0.75%
charge-off 0.80% 0.80% 0.80% 0.80%
JPMorgan NYSE:JPM delinquency 0.69% 0.66% 0.66% 0.66%
charge-off 1.15% 1.15% 1.02% 1.09%
Synchrony SYF delinquency 3.30% 3.10% 2.90% 3.00%
adjusted charge-off 3.00% 3.10% 3.00% 3.05%
Bread Financial BFH delinquency 5.70% 5.30% 4.80% 5.05%
charge-off 5.00% 5.30% 4.50% 4.90%
Citigroup NYSE:C delinquency 0.85% 0.82% 0.79% 0.81%
charge-off 1.12% 1.33% 1.19% 1.26%
Bank of America NYSE:BAC delinquency 0.92% 0.88% 0.85% 0.87%
charge-off 1.31% 1.24% 1.27% 1.26%
Avg. delinquency 2.19% 2.05% 1.89% 2.08%
Avg. charge-off 2.09% 2.13% 2.02% 2.04%

Note that Discover Financial (DFS) doesn’t report monthly credit metrics for the last month of each quarter. For Q3, the company reported credit card delinquency rate of 2.11%, up 35 basis points from the previous quarter, and its net charge-off rate of 1.92% fell 9 basis points from the previous quarter.

Earlier in the month, SA contributor Seeking Profits put a Conviction Buy on Capital One (COF), saying consumer credit fears are overblown

Credit card delinquency rates continued to slowly climb towards prepandemic levels in September, according to the average of seven banks monitored by Seeking Alpha. The average rate of 2.13% rose from 2.05% in August and from 1.89% in July. For some perspective, though, the average delinquency rate was 2.83% in September 2019, before COVID-19 prompted…

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