Fitch: U.S. Credit Card ABS Ends 1Q'15 on a High Note

NEW YORK--()--The most recent jobs report again bode well for U.S. credit card ABS this past month, with the historic streak likely to continue in the near term, according to the latest monthly index results from Fitch Ratings.

The Bureau of Labor Statistics reported on Friday that unemployment has remained steady at 5.5% with a drop of 20,000 in initial jobless claims to 268,000 for the week of March 28. This is the second lowest reading since April 2000. Additionally, the four-week average of 285,000 is the lowest since November of last year. The picture was equally bright for consumer confidence, which increased to 101.3 for the month of March, compared to the seven-year high of 103.8 that reached in January.

Fitch's Prime Credit Card Gross Yield Index increased to 18.80%. The index for March was 8.29% higher month-over-month (MOM) and 2.73% higher year-over-year (YOY). Seasonally, gross yield has increased during the March period every year except 2002. This increase in performance contributed to an increase of two basis points (bps) of the Prime Three-Month Average Excess Spread Index to 13.32%. The index is now 3.34% higher YOY.

Fitch's Prime Credit Card Chargeoff Index increased 11 bps to 2.78% and is 4.12% higher compared to the previous month. However, the index remains 3.81% lower YOY, 75% lower than its all-time high in 2009. Fitch's Prime Credit Card 60+ Day Delinquency Index also increased, up two bps to 1.13%. The index remains 8.13% lower YOY.

Fitch's Prime Credit Card Monthly Payment Rate (MPR) Index decreased to 26% and registered a 4.97% decline MOM but tracked 4.33% higher YOY.

Fitch's Prime Credit Card Index was established in 1991 and tracks over $145.4 billion of prime credit card ABS backed by approximately $253.5 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.

Similar to its Prime Index, Fitch's Retail Gross Yield Index increased to 29.47%. It is now 9.68% higher MOM, but is 66 bps lower YOY. The index has increased every March since the inception of the index in 2004, with an average increase of 10.76%. Likewise, Fitch's Retail Three-Month Average Excess Spread Index increased 39 bps to 17.91%. The index is 2.40% higher YOY.

Fitch's Retail MPR Index decreased 89 bps to 15.84%. It is now 4.92% lower MOM and seven bps lower YOY. This trend is related to seasonality as the index has decreased MOM in March for 10 of the past 12 years.

Fitch's Retail Credit Card 60+ Delinquency Index remained flat with a one bp decline to 2.56%. The index is 6.91% lower YOY. During the same period, Fitch's Retail Chargeoff Index increased 27 bps to 6.54%. The index is 4.31% higher MOM, but is 1.65% lower YOY. The index is 50.23% lower than its historical high of 13.14% reached in March 2010.

Fitch's Retail Credit Card Index was established in 2004 and tracks more than $20.7 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, L Brands, Bon Ton, and Dillard's, among others.

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Jenny Ovalle
Associate Director
+1-212-908-0849
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Michael Dean
Managing Director
+1-212-908-0556
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Jenny Ovalle
Associate Director
+1-212-908-0849
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Michael Dean
Managing Director
+1-212-908-0556
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com