Fitch: U.S. Credit Card ABS Robust Entering 2016
Performance of U.S. credit card ABS began 2016 in much the same way it trended throughout last year with near record levels across the board, according to the latest monthly index results from Fitch Ratings.
Prime credit card metrics for the most part stayed relatively steady this month after a strong January. Fitch's Prime Credit Card Chargeoff Index improved to 2.61%, roughly 2.25% lower year-over-year (YOY) and well below the 2009 peak of 11.52%. The measure of 60+ day delinquencies remained flat this month, increasing just three basis points (bps) to 1.06%. The delinquency index is 4.50% below prior year levels and well below the historical high of 4.54% reached in December 2009.
Fitch's Prime Credit Card Monthly Payment Rate (MPR) Index fell from its historical high to 27.13% for the month of February while remaining relatively flat YOY, decreasing only 1%. Fitch's Prime Credit Card Gross Yield Index also declined this month, falling to 17.95%. Fitch's Prime Credit Card Three-Month Excess Spread Index fell slightly to 13.69% for the month of February.
Fitch's Prime Credit Card Index was established in 1991 and tracks approximately $144.5 billion of prime credit card ABS backed by over $232.1 billion of principal receivables. The index is primarily composed of general purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, Discover, etc.
Fitch's Retail Credit Card Chargeoff Index declined slightly to 6.62% during the month, with the index over 50% lower than its all-time high of 13.4% from March 2010. Fitch's Retail Credit Card 60+ Day Delinquency Index increased 10 bps to 2.55% this month. After reaching its second highest historical value last month, Fitch's MPR Index fell to 16.51%. The index is 90 bps lower than the prior year. Fitch's Retail Credit Card Gross Yield Index dropped to 27.74% for the month of February, while the Three-Month Excess Spread Index decreased to 18.05% but remains 3.03% higher YOY.
Fitch's Retail Credit Card Index was established in 2004 and tracks approximately $20.9 billion of retail or private label credit card ABS backed by over $29.5 billion of principal receivables. The index is primarily composed of private label portfolios originated and serviced by Citibank (South Dakota) N.A, Synchrony Financial (Formerly GE Capital Retail Bank), and Comenity Bank (formerly World Financial Network National Bank). More than 165 retailers are incorporated including Walmart, Sears, Home Depot, Federated, Lowes, J.C. Penney, L Brands, Bon Ton, and Dillard's, among others.
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