NEW YORK--(BUSINESS WIRE)--U.S. credit card ABS continues to outperform given a strengthening U.S. economy, according to the latest monthly index results from Fitch Ratings
Prime chargeoffs and 60+ day delinquencies remain in record territory and have declined from recession highs by as much as 77%. Factors driving performance include a 14-year low in the four-week average of initial jobless claims, a seven-year high in consumer sentiment, and a personal savings rate that has risen to the highest level since 2012.
Fitch's Prime Credit Card Chargeoff Index declined five basis points (bps) in the September collection period, with chargeoffs now at 2.65%. The index has declined 15.06% year-over-year (YOY) and is now 77% below its historic high of 11.52% reached in September 2009.
Fitch's Prime Credit Card 60+ Day Delinquency Index increased eight bps to 1.07% in October after declining to an all-time low of 0.99% in the prior month. The index has declined 16.41% YOY and stands 76% below the high of 4.54% that was reached in January 2010.
Fitch's Monthly Payment Rate (MPR) Index increased 39 bps month-over-month (MOM) to 26.81%. Current levels remain well above the index's long-run average of 17.35%. Similarly, Fitch's Prime Credit Card Gross Yield Index increased 34 bps MOM to 18.56% in October.
Fitch's Prime Credit Card Three-Month Average Excess Spread Index rose to 13.51%, reaching a record high for the third consecutive month. This index has increased about six percent YOY and now stands at over twice its lifetime average of 6.61%.
Fitch's Prime Credit Card Index was established in 1991 and tracks over $135.3 billion of prime credit card ABS backed by approximately $247.9 billion of principal receivables. The index is primarily comprised of general-purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, Discover, etc.
Fitch's Retail Credit Card Chargeoff Index decreased by 35 bps this month to 5.72%. Although this index is down only two bps YOY, it has declined nearly 57% from its all-time high of 13.41% reached in March 2010. On the other hand, Fitch's Retail Credit Card 60+ Day Delinquency index increased 22bps MOM to 2.57% after hitting its all- time low two months ago.
Fitch's retail MPR index increased 29 bps to 15.93% in October. While, the Retail Credit Card Gross Yield Index decreased 15 bps to 27.74% from 27.89%. Fitch's Retail Three-month Average Excess Spread Index rose by 57 bps to 18.52%, marking the second highest level reached by this metric. Fitch's indexes for gross yield and three-month average excess spread remain higher YOY by 1.35% and 3.29%, respectively.
Fitch's Retail Credit Card Index tracks more than $17.8 billion of retail or private label credit card ABS backed by over $31.2 billion of principal receivables. The index is primarily comprised of private label portfolios originated and serviced by Citibank (South Dakota) 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, Limited Brands, Best Buy, Lane Bryant and Dillard's, among others.
Additional information is available at 'www.fitchratings.com'.