NEW YORK--(BUSINESS WIRE)--U.S. credit card ABS 60+ delinquencies and chargeoffs retreated from previous record lows, according to the latest monthly index results from Fitch Ratings.
After remaining below 1% for the past six months, Fitch's Prime ended its historic streak as the index rose to 1.01% for the month of November, which is well below the historical high of 4.54% reached in December 2009. Fitch's Prime Credit Card Chargeoff Index rose from its record low of 2.43% in October to 2.54% but remains 2.3% lower year-over-year and nearly 45% lower than the index high from September 2009. After improving for the past two months, Fitch's Prime Monthly Payment Rate (MPR) index retreated to 28.51% from 29.69% in October.
The Conference Board Consumer Confidence Index increased significantly for the month of November, reaching 107.1 up from 100.8 for the month of October. Consumer's optimism about current market conditions and short term outlook pushed the index higher and it now stands at its highest value since July 2007. Third-quarter GDP was revised up to 3.2% from 2.9%. The labor market continues to track near record lows, with four-week average jobless claims at 251,000 for the week of Nov. 19, which is 2,000 lower than the month of October according to the Bureau of Labor Statistics. The strong labor market bodes well for U.S. Credit Card ABS performance heading into the final months of 2016.
Fitch's Prime Credit Card Gross Yield Index rose for the second straight month to 19.14%. Fitch's Prime Credit Card Three-Month Excess Spread Index held steady this month, decreasing just one basis-point to 13.93%.
Fitch's Prime Credit Card Index was established in 1991 and tracks approximately $140.4 billion of prime credit card ABS backed by over $220.8 billion of principal receivables. The index is primarily composed of general purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, Discover, etc.
Retail credit card metrics retreated this month, as both chargeoff and 60+ delinquencies rose while gross yield fell. Fitch's Retail Credit Card Chargeoff Index increased for the third straight month to 6.71%; the index is 3.87% higher YOY. Fitch's Retail 60+ Day Delinquency Index continues to rise, increasing for the third month to 2.63%. The index stands at its highest value since December 2014. Fitch's Retail Credit Card MPR Index decreased to 15.52% for the month of August. Fitch's Retail Credit Card Gross Yield Index fell two bps to 29.34%. Fitch's Three-Month Average Excess Spread Index improved for the third month in a row to 19.49%, a new historical record.
Fitch's Retail Credit Card Index was established in 2004 and tracks approximately $18.9 billion of retail or private label credit card ABS backed by over $26.9 billion of principal receivables. The index is primarily composed of private label portfolios originated and serviced by Citibank N.A, Synchrony Financial (Formerly GE Capital Retail Bank), and Comenity Bank (formerly World Financial Network National Bank). More than 165 retailers are incorporated including Walmart, Sears, Home Depot, Federated, Lowes, J.C. Penney, L Brands, Bon Ton, and Dillard's, among others.
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