Signs of improvements in the credit card industry continued Thursday with American Express Co. and Capital One Financial Corp. reporting significant improvements in delinquencies and charge-offs.
AmEx, which said its net income surged more than 200% year-over-year to $1.02 billion, saw its net charge-off rate for U.S. cards fall to 6.2% from 10% a year earlier. The New York-based company’s 30-day-plus delinquency rate for U.S. cards also fell, to 2.7% from 4.4%.
As a result the improved conditions, AmEx’s provision for U.S. card losses declined 56%, to $519 million.
Cap One saw similar trends in its domestic card business during the second quarter. The McLean, Va.-based banking company’s net income for domestic cards rose 189% year-over-year to $483 million.
The net charge-off rate was 9.5%, up from 9.2% in the year-ago quarter but down from 10.5% in the previous quarter.
Cap One's 30-day-plus delinquency rate also fell to 4.8% from the 5.3% in the previous quarter but was flat with a year ago. The company's provision for domestic card losses was $675 million, down considerably from $1.34 billion a year ago.
