- Receivables showed positive YoY growth for the first time in five quarters.
- Purchase Volume growth continues to be quite strong, with all issuers reporting 15%+ YoY growth; AmEx and Chase, in particular, reported over 30% YoY growth.
- Net Charge-Offs continue to remain at historically low levels primarily due to high payment rates; all issuers reported significant QoQ declines in charge-offs, signaling a further reduction in credit loss levels for 2021.
- Despite the QoQ decline in charge-offs, many issuers expect losses will begin to increase/normalize in 2022 (but at what level is the key question, issuer predictions continue to change each quarter).
- Issuer profitability remains at highly elevated levels due to continued reserve releases and low credit losses; however, profitability seems to have plateaued as most issuers reported slight QoQ declines in AT ROA for the past two quarters.
Alliance Data added Sezzle to Bread’s installment lending network; Synchrony announced a new Gardner White PLCC partnership (formerly ADS); Alliance Data announced a new PLCC partnership with Tourneau (formerly TD); Afterpay announced an omnichannel partnership with PetSmart; Affirm partnered with Amazon to add to AMZN’s POS financing solutions.
Barclays renewed its co-brand partnership with JetBlue; Synchrony extended several key relationships including TJX, American Eagle and Ashley HomeStores; Alliance Data renewed PLCC partnerships with GameStop and Petland.
SYF announced its new Pay in 4 product; FNBO announced the launch of its new BNPL solution (Slice); Wells Fargo launched its new Reflect credit card; COF, Chase and USB all announced testing of or are considering BNPL products; Goldman Sachs and Apple are developing an installment loan solution.
Mobile & tech
Synchrony will launch a new savings account in partnership with PayPal; Goldman Sachs announced its acquisition of GreenSky for $2.2B; Chase launched its new B2B real-time payment solution “Request for Pay“; Truist announced the acquisition of Service Finance; Square announced its acquisition of Afterpay.
Industry statistics (based on non-retail card issuers in scorecard section)
1 Total receivables for all issuers below at end of 3Q21.2 Total purchase volume of all issuers below in 3Q21, not annualized.3 After-Tax ROA of issuers that publicly report – Citigroup, Capital One, Synchrony, Discover and ADS.4 YoY = Year-over-year change versus 3Q20. 5 QoQ = Quarter-over-quarter change versus 2Q21.
Issuer scorecard ($billions)-Q3 2021
1 Capital One is US consumer and small business credit cards and installment loans. Purchase volume excludes cash advances. 2 American Express changed its 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 Digital Banking segment (credit card loans represents ~80% of Digital Banking loans). 4 All figures include all SYF business lines (i.e., Home & Auto, Digital, Diversified & Value, Health & Wellness, Lifestyle and Other). Credit Card accounts for ~95% of total receivables. 5 Average receivables of $15.5B (does not include loans held for sale).
Year-over-year growth rate trends
Profitability trends – ROA proxy
1 After-Tax ROA is a weighted average of – Citigroup, Capital One, Synchrony, Discover and ADS.
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