November credit card delinquencies hold steady, charge-offs climb
Contributor since / Followers
andreswd
Credit card delinquency rates, on average, declined during November, while net charge-offs decidedly increased, according to data compiled from eight large credit card lenders.
The average delinquency rate stood at 3.11%, edging down from 3.14% in October and nearly even with 3.10% a year ago.
The average net charge-off rate of 4.29% jumped from 3.69% in the prior month and 3.91% in November 2023.
Saul Martinez, equity research analyst at HSBC, observed that November 2024 credit metrics “continued showing moderation in Y/Y increases in delinquency ratios for Capital One, Discover, and Synchrony. However, net charge-offs(NCOs) remained sticky and above pre-pandemic levels despite healthy labor market conditions.”
With the latest data, Martinez doesn’t find credit card valuations to be compelling. He remains Hold on Synchrony Financial (NYSE:SYF), American Express (NYSE:AXP), and Discover Financial (NYSE:DFS) and Reduce on Capital One Financial (NYSE:COF).
The credit card lending of the eight banks in Seeking Alpha’s table totaled $513.9B in November, up 0.9% from $509.5B in October.
The rate of Y/Y loan growth appears to be decelerating, though, HSBC’s Martinez said. Capital One’s (NYSE:COF) Y/Y loan growth of 5.0% dropped from a 13.4% increase a year ago. Discover’s (NYSE:DFS) credit card loan growth dropped to 0.4% Y/Y from 14.8% in November 2023. And American Express’s (NYSE:AXP) U.S. consumer card member loan growth slipped to 9.8% from 15.5%, he said.
|
–
|
|
|
2024
|
2023
|
2019
|
|
|||
| Company | Ticker | Type | Nov. | Oct. | Sept. | 3-month average | Nov. | Nov. |
bps change, Nov.. ’19 to Nov. ’24
|
| Capital One | NYSE:COF | delinquency | 4.57% | 4.61% | 4.53% | 4.57% | 4.55% | 3.91% | 66 |
| charge-off | 6.08% | 5.82% | 5.23% | 5.71% | 5.19% | 4.43% | 165 | ||
| American Express | NYSE:AXP | delinquency | 1.4% | 1.4% | 1.4% | 1.4% | 1.4% | 1.6% | -20 |
| charge-off | 2.0% | 2.4% | 1.9% | 2.1% | 1.7% | 2.4% | -40 | ||
| JPMorgan | NYSE:JPM | delinquency | 0.87% | 0.87% | 0.87% | 0.87% | 0.99% | 1.17% | -30 |
| charge-off | 1.64% | 1.62% | 1.57% | 1.61% | 1.75% | 2.20% | -56 | ||
| Synchrony | NYSE:SYF | delinquency | 4.9% | 4.9% | 4.8% | 4.9% | 4.7% | 4.6% | 30 |
| adjusted charge-off | 6.2% | 6.4% | 6.2% | 6.3% | 5.6% | 4.9% | 130 | ||
| Discover | NYSE:DFS | delinquency | 3.87% | 3.87% | 3.84% | 3.86% | 3.76% | 2.61% | 126 |
| charge-off | 5.37% | 4.31% | 5.36% | 5.01% | 4.71% | 3.46% | 191 | ||
| Bread Financial | NYSE:BFH | delinquency | 6.2% | 6.4% | 6.4% | 6.3% | 6.5% | 5.9% | 30 |
| charge-off | 8.0% | 7.9% | 7.4% | 7.8% | 7.9% | 6.3% | 170 | ||
| Citigroup | NYSE:C | delinquency | 1.53% | 1.52% | 1.44% | 1.50% | 1.47% | 1.58% | -5 |
| charge-off | 2.40% | 2.36% | 2.53% | 2.43% | 2.21% | 2.57% | -17 | ||
| Bank of America | NYSE:BAC | delinquency | 1.51% | 1.52% | 1.48% | 1.50% | 1.41% | 1.63% | -12 |
|
|
charge-off | 2.66% | 2.41% | 2.52% | 2.53% | 2.24% | 2.60% | 6 | |
| Avg. delinquency | 3.11% | 3.14% | 3.10% | 3.11% | 3.10% | 2.88% | 23 | ||
| Avg.charge-off | 4.29% | 3.69% | 4.09% | 4.02% | 3.91% | 3.61% | 68 | ||