In the latest quarterly financials, the leading U.S. credit card issuers displayed consistent trends in credit quality, purchase volumes and card loans.
- Credit quality: issuers continued to report strong yearly and quarterly declines in charge-off rates. The current rate of decline, as well as the high rates of decline in delinquency rates, indicate that charge-off rates will fall further in the next few quarters.
- Purchase volume: All leading credit card issuers are growing purchase volumes year-on-year, with four issuers reporting double-digit volume growth. In addition, issuers like Chase and Capital One have accelerated volume growth in recent quarters. In 1Q11, Citi reported a small y/y rise of 0.3%, which followed a protracted period of volume decline. The 7 issuers listed in the chart had a combined $321 billion in purchase volume, up 9% y/y.
- Average Outstandings: Although issuers have been effective in growing purchase volume, average outstandings for all leading issuers continued to decline year-on-year in 1Q11. The 8 issuers combined for $515 billion in average outstandings in the quarter, down 18% from 1Q10. The rate of decline slowed in 1Q11, with combined outstandings for the 8 issuers down 1.4% from 4Q10. And Discover reported 1.7% quarterly growth in average outstandings. Many issuers have reported that they expected outstandings to grow in the second half of 2010.