NEW YORK--(BUSINESS WIRE)--U.S. credit card ABS collateral performance will likely remain positive and rating stability for the sector should continue, building on the sector's significant increase in performance gains this year, Fitch Ratings says. Performance has exceeded our expectations and could signal a shift in historical trends.
Fitch's preliminary Prime Chargeoff Index is anticipated to decline from its seven-year low reached last month. This would be the fifth consecutive month that chargeoffs have decreased. We expect Fitch's Prime 60+ Day Delinquency Index to decrease for the sixth consecutive month, which would be another all-time low.
Results for Fitch's preliminary Prime Monthly Payment Rate (MPR) Index and Prime Gross Yield Index were less favorable. After reaching a second all-time high in a three-month span last month, MPR is anticipated to shy away from this record. Gross yield is expected to decline after a slight increase in the previous month.
Fitch's preliminary Retail Gross Yield Index will likely increase over 100 basis points on a month-over-month basis. This would mark the largest increase in gross yield in the past six months. Fitch's Retail MPR Index will likely slightly increase from last month.
In contrast, we expect Fitch's Retail Chargeoff Index to rise after three consecutive months of decline. This is partially driven by flattening delinquencies in recent months. Fitch's Retail 60+ Day Delinquency Index is expected to increase towards levels not seen in four months. Actual results for Fitch's Prime and Retail Credit Card Indices will be available in early October.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.