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Overall, credit card metrics for U.S. credit card issuers held up well in June. And while some companies, especially Bread Financial (NYSE:BFH), saw delinquency and net charge-off rates essentially back to prepandemic levels, others are still seeing fewer late payments and lower charge-offs than in the before times.
On average, credit card delinquency rates ticked up 2 basis points in June from May, while average net-charge offs declined month-to-month as seen in the table below.
When comparing against June 2019, delinquency rates at American Express (NYSE:AXP), Citigroup (NYSE:C), and Bank of America (NYSE:BAC) all still remain at least 30 basis points lower. JPMorgan (NYSE:JPM), down 25 bps from June 2019, is the only one with a delinquency rate under 1%.
For net charge-offs, four card issuers have rates that are at least 80 bps lower than their June 2019 levels — JPMorgan (JPM), Synchrony (NYSE:SYF), Citigroup (C), and Bank of America (BAC).
As usual, Discover Financial (NYSE:DFS) isn't in this month's table because it doesn't report monthly credit card metric data for the last month of each quarter. That will be included in its July data. In Q2 results, Discover said credit card net principal charge-off rate increased to 3.68% from 3.10% in Q1 2023 and exceeding 3.49% in Q2 2019. Its 30+day delinquency rate rose to 2.86% from 2.76% in Q1 and from 2.34% in Q2 2019.
How do investors feel about the stocks? For the pure-play credit card stocks, most have failed to keep up with the broader S&P 500 Index year-to-date. The best-performing name, Capital One (NYSE:COF) has gained 23%, beating SPY's 20% showing. Bread Financial (BFH), the name with the higest levels of delinquencies and charge-offs, turned in the worst performance, rising only 3.9%.
A month on its own doesn't tell the whole story. Looking at longer term quarterly data, Capital One (COF) and Discover Financial (DFS) have roughly reverted to more normal credit trends.
| 2023 | ||||||||
| Company | Ticker | Type | June | May | April | 3-month average | June 2019 | Change in bps |
| Capital One | COF | delinquency | 3.74% | 3.64% | 3.57% | 3.61% | 3.40% | 34 |
| charge-off | 4.38% | 4.50% | 4.26% | 4.38% | 4.55% | -17 | ||
| American Express | AXP | delinquency | 1.10% | 1.10% | 1.10% | 1.10% | 1.40% | -30 |
| charge-off | 1.80% | 1.60% | 1.50% | 1.55% | 2.20% | -40 | ||
| JPMorgan | JPM | delinquency | 0.88% | 0.85% | 0.87% | 0.86% | 1.13% | -25 |
| charge-off | 1.60% | 1.60% | 1.58% | 1.59% | 2.42% | -82 | ||
| Synchrony | SYF | delinquency | 3.80% | 3.80% | 3.70% | 3.75% | 4.00% | -20 |
| adjusted charge-off | 4.70% | 4.90% | 4.70% | 4.80% | 5.50% | -80 | ||
| Bread Financial | BFH | delinquency | 5.50% | 5.50% | 5.50% | 5.50% | 5.20% | 30 |
| charge-off | 7.70% | 8.40% | 7.80% | 8.10% | 5.80% | 190 | ||
| Citigroup | C | delinquency | 1.17% | 1.15% | 1.14% | 1.15% | 1.51% | -34 |
| charge-off | 1.76% | 2.06% | 1.99% | 2.03% | 2.56% | -80 | ||
| Bank of America | BAC | delinquency | 1.20% | 1.15% | 1.17% | 1.16% | 1.56% | -36 |
| charge-off | 1.90% | 1.95% | 1.89% | 1.92% | 2.71% | -81 | ||
| Avg. delinquency | 2.48% | 2.46% | 2.44% | 2.46% | 2.60% | -12 | ||
| Avg. charge-off | 3.41% | 3.57% | 3.39% | 3.46% | 3.68% | -27 | ||
More on Credit Card Stocks:
- SA Quant, SA Analyst, and Wall Street ratings on credit card stocks
- Capital One Financial: Limited Upside (Rating Downgrade)
- Citigroup: Still Not Getting The Respect It Deserves - Shares Cheap
- Discover Financial: Don't Fall for the Value Trap
- American Express stock slips on concerns of revenue growth decelerating