U.S. Credit Card Market Segmentation Snapshot

Navigator Edition: February 2016
By: Frank Martien

Analysis of FDIC call report data via SNL reveals a dynamic and relatively healthy U.S. credit card market across various credit card issuing bank segments. Total balances of $672 billion were heavily concentrated in the National (61% share) and Specialist (34% share) segments; however, the highest growth rate in balances came from the Regional ($1 to 10 billion) segment. Meanwhile, interest yields were highest among Specialists, which include a broader spectrum of credits, and were lowest among Community banks who often deploy low rate pricing in managing credit card programs offered primarily to enhance overall banking relationships. Loss rates were remarkable consistent across segments and demonstrated little change from 4Q 2014 figures.

Looking into 2016, increases are projected for interest rates and for net loss rates; however, projected rates of increase are modest and should be manageable across credit card issuing bank segments.

Figure 1: Segmented View of U.S. Credit Card Metrics

Figure-1_-US-Credit-Card-Market-Segmentation-Snapshot-(4Q-2015-vs-4Q-2014)Note: Figures for interest yield and net loss rate in each segment are simple averages across banks. For National 4Q 2014, outlier data was omitted for one of the banks in calculating the average.

1 “National” includes Bank of America, National Association, Chase Bank USA, National Association, Citibank, N.A., First National Bank of Omaha, JPMorgan Chase Bank, National Association, U.S. Bank National Association, Wells Fargo Bank, National Association, and Wells Fargo Financial National Bank.
2 “Specialist” includes American Express Centurion Bank, Barclays Bank Delaware, BMW Bank of North America, Capital One Bank (USA), National Association, Capital One, National Association, Comenity Bank (ADS), Comenity Capital Bank (ADS), Department Stores National Bank, Discover Bank, Merrick Bank Corporation, TCM Bank, National Association (affiliated with ICBA), TIB-The Independent BankersBank, and World’s Foremost Bank (Cabela’s).
3 “Regional $1 to 10 bil” includes Banco Popular de Puerto Rico, Branch Banking and Trust Company (BB&T), Citizens Bank, National Association, Fifth Third Bank, PNC Bank, National Association, Regions Bank, SunTrust Bank, TD Bank USA, National Association, and TD Bank, N.A. These banks reported between $1 billion and $10 billion in managed credit card receivables balances as of 4Q 2015.
4 “Regional $100 mil to $1 bil” is comprised of 26 banks with $100 million to $1 billion in credit card balances.
5 “Regional $10 to $100 mil” is comprised of 43 banks with $10 to 100 million in credit card balances.
6 “Community” is comprised of 270 banks with $1 to $10 million in credit card balances. Banks with less than $1 million and credit unions were omitted from this analysis.
7 Analysis inclusive of U.S. commercial banks and savings banks only. As of December 31, 2015, an additional $176 billion were held by savings & loan associations led by one of Amex’s issuing banks, Synchrony affiliates, USAA affiliates; and an additional $48 billion in credit card loans were held by credit unions.

For more information, please contact Frank Martien, Partner, frank.martien@firstannapolis.com, specializing in Commercial Payments and Bankcard Issuing.



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