Credit performance at the nation's biggest card lenders continued a jagged orbit in September, as some measures improved from August but others weakened — and losses overall stayed at record altitudes.
Capital One Financial Corp.'s chargeoff rate increased 45 basis points, to 9.77%, after having fallen 51 basis points in August.
The share of the $172 billion-asset McLean, Va., banking company's credit card loans that were more than 30 days past due continued to worsen, growing by 29 basis points from August, to 5.38%.
Meanwhile, the chargeoff rate for securitized receivables at $43 billion-asset Discover Financial Services declined 47 basis points, to 8.69%.
The Riverwoods, Ill., banking company reported that the percentage of loans more than 30 days past due increased 22 basis points, to 5.57%.
At Bank of America Corp., whose securitization trust has reported the worst chargeoff rates recently among the six largest issuers, this measure declined 29 basis points, to 14.25%. The percentage of loans more than 30 days past due increased 6 basis points, to 7.53%. The $2.3 trillion-asset Charlotte banking company was scheduled to report third-quarter results today.
The chargeoff rate for both securitized and balance-sheet card loans at American Express Co. continued to decline, dropping 60 basis points, to 8.4%, while the percentage of loans more than 30 days past due held steady at 4.1%. The $117 billion-asset New York banking company has asserted that its chargeoff rate peaked in the second quarter at 10%.
JPMorgan Chase & Co. posted third-quarter results Wednesday, reporting that its chargeoff rate for the period increased 44 basis points from the second quarter, to 9.41%, excluding the portfolio it acquired last year with the banking operations of Washington Mutual Inc. The $2 trillion-asset New York banking company forecast that the chargeoff rate would reach about 10.5% by the middle of next year.
In a conference call, chief executive Jamie Dimon reiterated the forecast that its card business would lose money next year, saying the losses "could be north of a billion dollars in both the first and second quarter."
"What we are doing in the card business is really looking past 2010," Dimon said of efforts to introduce products and retool for what will probably be a smaller operation because of tighter credit standards.
Citigroup Inc., which reported third-quarter results Thursday, said its chargeoff rate for loans on cards with the Citi brand fell 11 basis points from the second quarter, to 10.15%. The chargeoff rate for its "retail partners" portfolio fell 86 basis points, to 13.3%. The $1.9 trillion-asset New York banking company has put these loans into Citi Holdings, a repository for assets it is looking to divest.
