- Receivables growth of 5 percent YoY, flat compared to Q1 YoY growth (prior to that, six straight quarters of slowing growth)
- Purchase volume continues to outpace receivables; rewards / high spend cardholders remain in focus for issuers
- For the third straight quarter, Chase, Capital One and Synchrony led all issuers in purchase volume growth (over 10 percent YoY)
- American Express and US Bank led all issuers in receivables growth with YoY increases of over 8.5 percent, followed closely behind by Chase
- Loss rates remained relatively stable and have declined slightly compared to the prior quarter. Banks remain confident in the state of the US consumer, yet late cycle and macro-economic concerns linger. Credit card volume growth continues to outpace receivables with several issuers reporting double-digit growth. Card receivables growth (YoY) was the same as last quarter, a positive sign after six straight quarters of slowing growth.
- Despite ongoing rewards competition, card profitability remains strong
- Banks generally highlight continued strength of US consumer (although investors have concerns regarding the macroeconomic environment outlook)
Apple and Goldman Sachs launch the Apple Card to the general public mid-August; Sonesta Hotels launched new co-brand program with Bank of America; Burlington and Carter’s launched new PLCC programs with ADS; Ethan Allen and TD announced partnership to launch private label program; Interval International launched co-brand card with ADS; FinTech startup, Brex, launched new SMB card with Emigrant Bank; Capital One and James Beard Foundation announced credit card and banking partnership; T-Mobile launched nation-wide checking account in partnership with BankMobile; Klarna announced multiple new partnerships (Expedia, H&M, Abercrombie & Fitch)
Amazon and SYF expanded partnership with new secured “credit builder” PLCC; Chase and Southwest expand business portfolio with new SMB card; Synchrony renewed its sales finance partnership with Suzuki
Amex launched a refresh of its Blue Cash Preferred Card and Gold Card value proposition; Mastercard announced new benefits for its World and World Elite cardholders; card startup, Petal, enhanced cash-back value proposition
Mobile & tech
Facebook announced plan for 2020 launch of new cryptocurrency, Libra; NYC subway launched contactless payments, reported 4x higher adoption than anticipated (1 million+ taps in 3 months, 80 percent smartphone)
Industry statistics (based on non-retail card issuers in scorecard section)
1 Total receivables for all issuers below at end of 2Q19. 2 Total purchase volume of all issuers below in 2Q19, not annualized. 3 After-Tax ROA of issuers that publicly report – Citigroup, Capital One, Synchrony and Discover 4 YoY = Year-over-year change versus 2Q18. 5 QoQ = Quarter-over-quarter change versus 1Q19.
Issuer scorecard ($billions)—Q2 2019
1 Capital One is US consumer and small business credit cards and installment loans. Purchase volume excludes cash advances. 2 American Express: Changed reporting method as of 2Q18; all figures are for US Consumer segment (revolving and charge products) which no longer reports net income. 3 Discover receivables, purchase volume (excludes cash advances), and losses are US domestic card only; ROA includes all of Direct Banking segment (credit card loans represents ~80% of Direct Banking loans). 4 All figures include all of SYF’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for ~70% of total receivables. YoY growth in receivables includes the acquisition of PayPal Credit in 3Q ’18 (+$7.6B) and SYF moved Walmart to held-for-sale in 1Q19. 5 Active receivables grew ~11% YoY – the ~2.1% decrease reflects sale/reclassifications to held-for-sale of non-strategic clients.