Q2 2014 U.S. Credit Card Issuer Performance Snapshot

Navigator Edition: September 2014
By: James Watts

Credit card receivables in the U.S. grew by 2.8% on a quarter-over-quarter basis and 2.9% on a year-over-year basis in the second quarter of 2014. As a modest sign of progress, this level of receivables growth marks the largest year-over-year increase since the fourth quarter of 2008. Year-over-year growth was nearly universal as five issuers, Citi, American Express, Discover, Wells Fargo, and US Bank, posted increases in receivables of more than 4.0%. The punch on U.S industry performance is that loss rates remain benign, purchase volume is healthy, and profitability is strong. There is cautious optimism in the first sign of receivables growth in quite some time.

Q2-Issuer-Snapshot1 Includes income from acquiring business and private label receivables and volume.
2 Earnings restated in 1Q 2014, historical figures adjusted to conform to new reporting methodology. Purchase volume includes cash advances.
3 Receivables, purchase volume, and net loss rates are for U.S. consumer cards. After-tax ROA restated to include “Consumer Lending” only; which now includes Dealer Financial Services. Period amounts have been reclassified to conform to current period presentation.
4 U.S. card business, small business, installment loans only. Purchase volume excludes cash advances. 2Q12 Results include the impact of May 1, 2012 closing of HSBC transaction resulting in approx $28.2 billion in receivables at closing.
5 Receivables and charge-offs are for U.S. Cardmember Lending business only. Purchase volume is for U.S. Card Services segment, consumer and small business.
6 Includes U.S. domestic receivables and purchase volumes only. Restated: ROA reflective of Direct Banking segment (80+% credit card) and implied U.S. Cards tax rate of ~40%. ROA denominator estimated from total loans ended totals.
7 Wells Fargo began reporting purchase volume in 4Q 2013. 1Q 12 figure an estimate based on an average turn of 2.0x.
8 After Tax ROA reflects Payment Services line of business income and average loans. Earnings restated in 1Q 2014, historical figures adjusted to conform to new reporting methodology.
9 After Tax ROA excludes Wells Fargo. Credit specific income not reported. Reflects any previous quarter restatements and includes addition of U.S. Bank.

For more information, please contact James Watts, Manager, specializing in Credit Card Issuing, james.watts@firstannapolis.com.

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