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  • @fintechna 3:35 am on September 8, 2018 Permalink | Reply
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    Q2 2018: US credit card issuer snapshot 

    Each quarter, Paul Sammer, Manager in the Issuing offering, compiles key metrics on US consumer cards, tracking spend, receivables, loss rates and returns reported by the largest US .

    US consumers are showing an increased preference for credit cards.  Banks reported robust growth in purchase volume over the past quarter, along with solid growth in receivables and benign loss rates. Read more about the key themes and notable happenings below.

    Key themes

    • Banks reported favorable credit trends in the past quarter as purchase volume and receivables continued to grow, and loss rates remained benign.
    • Credit card purchase volume increased at a significant pace over the past year, led by Capital One, American Express and Chase.
    • Receivables also grew at a healthy rate, most notably at American Express, Capital One and Discover.
    • New products and product refreshes were prevalent in Q2. Many of these new products are offering high-value incentives to open/activate.
    • Investments in digital capabilities are evident across the industry with new all-digital products (e.g., Chase’s Finn), and full-service functionality in digital channels.
    • Bank of America and Chase reported notable declines in card originations in the past quarter (nearly 10 percent YoY).
    • Issuers pointed to rewards (and associated cost) as a basis of differentiation, but there was a general theme of rational competition in most respects.

    Notable happenings

    Transactions

    Citibank completed $ 1.5B acquisition of L.L. Bean credit card portfolio from Barclays; Synchrony and PayPal finalized transfer of $ 7.6B in receivables; Signet Jewelers closed last phase of credit outsourcing, selling its non-prime portfolio to CarVal Investors and Castlelake.

    New Partnerships

    Alliance Data and IKEA introduced new co-brand offering 5 percent rewards on IKEA purchases; American Express announced new partnership with Amazon to offer a small business co-brand credit card; Wells Fargo launched no-fee Wells Fargo Propel American Express card.

    Partnership Developments

    In July, Walmart announced its intent to partner with Capital One and end its Synchrony relationship; Citibank renewed its card partnership with Sears, paying $ 425 million up front in a highly customized structure; Alliance Data and Victoria’s Secret renewed their PLCC partnership.

    New Products/Features

    American Express launched its no-fee, 1.5 percent cash back Cash Magnet card; Citi and American Airlines introduced new no-fee AAdvantage MileUp card, offering 2 miles per dollar; Chase and Hyatt introduced $ 95 annual fee World of Hyatt Card; Chase and Marriott introduced $ 95 fee Marriott Rewards Premier Plus card; Chase and Southwest Airlines introduced $ 149 annual fee Southwest Airlines Priority Card; Synchrony and Belk will introduce a co-brand credit card.

    Mobile & Tech

    Chase announces a partnership with Tock, a high-end dining program.

    Stay tuned for next quarter’s report on US consumer credit card trends.

    Industry trends (based on non-retail card issuers in scorecard section)

    Q2 2018: US credit card issuer snapshot fintech

    1 Total receivables for non-retail issuers at end of 2Q18. 2 Total purchase volume of non-retail issuers in 2Q18. 3 After-tax ROA excludes Wells Fargo, Chase, Bank of America and US Bank, which do not report credit-specific income. 4 YoY = Year-over-year change versus 2Q17. 5 QoQ = Quarter-over-quarter change versus 1Q18. Note: Purchase Volume is reported volume for the quarter (it is not annualized or TTM)

    Scorecard—Q2 ($ in Billions)

    Q2 2018: US credit card issuer snapshot fintech

    1 Chase no longer discloses an ROA measure directly attributable to Card Services. 2 Citigroup: Purchase volume includes cash advances. Citigroup data includes Citi-Branded Cards and Citi Retail Services. 3 Capital One: US card business, small business, installment loans only. Purchase volume excludes cash advances. 4 Bank of America: Receivables, purchase volume and net loss rates are for US consumer cards. 5 Discover: includes US domestic receivables and purchase volumes only. Restated: ROA reflective of Direct Banking segment (credit card represents ~80% of loans) and implied US Cards tax rate of ~22%. ROA denominator estimated from total loans ended figures. 6 American Express: Changed reporting method as of 2Q18. All figures except ROA are for US Consumer segment; Amex has stopped reporting net income attributable to US consumer segment. ROA is estimated based on US receivables comprising 88% of Global Consumer segment and 22% US effective tax rate. 7 US Bank: Net Income attributable to Payments Services totaled $ 361M as of 2Q18, compared to $ 282M in 2Q17; Payments Services includes revenue from consumer credit cards, as well as commercial revenue and other sources. 8 A/R and PV for Retail Card unit only. 9 Loss rates and ROA include all of SYF’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for about 70% of total receivables. 10 Average Receivables.

     

    Q2 2018: US credit card issuer snapshot fintech Paul Sammer, Manager, Payments

    Q2 2018: US credit card issuer snapshot fintechQ2 2018: US credit card issuer snapshot fintech

     

     

     

    The post Q2 2018: US credit card issuer snapshot appeared first on Accenture Banking Blog.

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  • @fintechna 3:35 pm on May 18, 2018 Permalink | Reply
    Tags: , , , , , , issuer, ,   

    Q1 2018: U.S. credit card issuer snapshot 

    Guest blogger Paul Sammer reviews U.S. consumer use of cards to pay for transactions, fund loans, and receivables and transaction volume in Q1 .

     

    As purchase volume and receivables continued to rise during the recent quarter, several issuers reported material increases in returns resulting from tax reform. Read more about the key themes and notable happenings below.

    Key themes

    • Purchase volume in Q1 2018 continued to increase at a significant pace year-over-year, along with strong growth in receivables.
    • Chase, Capital One, Bank of America, and American Express reported robust purchase volume growth year-over-year, while American Express, Discover and Capital One led in terms of receivables growth.
    • cited increased consumer confidence and tax reform as drivers of strong purchase volume.
    • Loss rates continued to normalize although several banks suggested that losses may be stabilizing.
    • ROAs were bolstered by tax reform, which had a substantial impact on reported returns.

    Investment is ongoing in digital, mobile and self-service capabilities.

    Notable Happenings

    Transactions:

    • American Express and Citi complete sale of Citi’s $ 1.2 billion Hilton portfolio to American Express.

    New Partnerships:

    • Starbucks launches a new with Chase; Synchrony announces partnership with Crate and Barrel to offer a new private label credit card and co-brand card; Alliance Data and Lucky Brand agree to introduce a new private label credit card; Synchrony becomes preferred financing partner for Mahindra Powersports.

    Partnership Developments:

    • Due to retail partner bankruptcies, Synchrony replaces qualifying Toys “R” Us credit card accounts with a 2 percent cash back Mastercard and Alliance Data closes Bon-Ton accounts; Synchrony announces that it plans to onboard the PayPal Credit portfolio in 3Q18.

    New Products/Features:

    • Amazon introduces 5 percent back at Whole Foods on Amazon Prime Rewards Visa card; Chase announces new ultra-premium Marriott Rewards Premier Plus card and Amex announces new ultra-premium SPG Amex Luxury card (with single loyalty program branding coming in 2019).

    Mobile & Tech:

    • Synchrony invests in Payfone, provider of identity authentication in digital channels; Goldman Sachs acquires credit card startup Final.

    Industry trends (based on non-retail card issuers in scorecard section)

    Q1 2018: U.S. credit card issuer snapshot fintech1 Total receivables for non-retail issuers at end of 1Q18. 2 Total purchase volume of non-retail issuers in 1Q18. 3 After-Tax ROA excludes Wells Fargo, Chase, Bank of America and US Bank, which do not report credit specific income. 4 YoY = Year-over-year change versus 1Q18. 5 QoQ = Quarter-over-quarter change versus 4Q17. Note: Purchase Volume is reported volume for the quarter (it is not annualized or TTM)

    Scorecard—Q1 2018 ($ in Billions)

    Q1 2018: U.S. credit card issuer snapshot fintech
    1 Chase no longer discloses an ROA measure directly attributable to Card Services. 2 Citi: Purchase volume includes cash advances. Citigroup data includes Citi-Branded Cards and Citi Retail Services. 3 Capital One: U.S. card business, small business, installment loans only. Purchase volume excludes cash advances. 4 Bank of America: Receivables, purchase volume, and net loss rates are for U.S. consumer cards. 5 Discover: includes U.S. domestic receivables and purchase volumes only. Restated: ROA reflective of Direct Banking segment (credit card represents ~80% of loans) and implied U.S. Cards tax rate of ~22%. ROA denominator estimated from total loans ended figures.
    6 American Express: Changed reporting method as of 1Q16. Figures are for U.S. Consumer segment only and exclude small business. 7 totaled $ 343M as of 1Q18, compared to $ 309M in 4Q17 8 A/R and PV for Retail Card unit only. 9 Loss rates and ROA include all of SYNCHRONY ’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for about 70% of total receivables. 10 Average Receivables.

    We are excited to share Q1 2018: Credit Card Issuer with you. Stay tuned for next quarter’s analysis.

     

    Q1 2018: U.S. credit card issuer snapshot fintech

    Paul Sammer, Manager

    Q1 2018: U.S. credit card issuer snapshot fintechQ1 2018: U.S. credit card issuer snapshot fintech

     

     

     

     

    The post Q1 2018: U.S. credit card issuer snapshot appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 pm on March 13, 2018 Permalink | Reply
    Tags: , , , , , , , issuer, ,   

    Q4 2017: U.S. credit card issuer snapshot 

    Although issuers are benefiting from increased spend and receivables, rising loss rates and rewards costs are continuing to suppress ROAs.

    Key themes

    • Receivables and spend increased year-over-year for all
    • American Express, Discover and Capital One led in terms of year-over-year receivables growth
    • Chase and Capital One led in terms of year-over-year purchase volume growth, although all issuers reported strong growth
    • Several banks have suggested that competitive intensity has moderated slightly
    • Although loss rates are normalizing, they remain below historical averages
    • Investments are being made in machine learning, mobile and advanced analytics

    Notable happenings

    Transactions:

    • PayPal announces an agreement to sell its $ 5.8 billion portfolio of U.S. consumer receivables to Synchrony

    Partnership Renewals:

    • Marriott signs renewal agreements with Chase and American Express

    New Partnerships:

    • Uber and Barclays introduce a new no-fee credit card
    • Alliance Data gains new partners IKEA and Adorama

    New Products/Features:

    • Hilton and American Express introduce a new high-end fee card, Aspire
    • Amazon opens its cashier-free store Amazon Go to the public
    • Chase introduces mobile payments as a bonus category on Freedom cards

    Mobile & Tech: 

    • Target introduces a proprietary wallet in its mobile app
    • Kroger and Chase Pay partner on mobile payments

    Industry trends (based on non-retail card issuers in scorecard section)

    Q4 2017: U.S. credit card issuer snapshot fintech
    Click to view larger

    1 Total receivables for non-retail issuers at end of 4Q17. 2 Total purchase volume of non-retail issuers in 4Q17. 3 After-Tax ROA excludes Wells Fargo, Chase, Bank of America and US Bank, which do not report credit specific income. 4 YoY = Year-over-year change versus 4Q16. 5 QoQ = Quarter-over-quarter change versus 3Q17. Note: PV is reported PV for the quarter (it is not annualized or TTM)

    scorecard—Q4 ($ in Billions)

    Q4 2017: U.S. credit card issuer snapshot fintech
    Click to view larger

    1 Chase no longer discloses an ROA measure directly attributable to Card Services. 2 Citi: Purchase volume includes cash advances. 3 Capital One: U.S. card business, small business, installment loans only. Purchase volume excludes cash advances. 4 Bank of America: Receivables, purchase volume and net loss rates are for U.S. consumer cards. ROA estimate is discontinued. 5 Discover: includes U.S. domestic receivables and purchase volumes only. Restated: ROA reflective of Direct Banking segment (credit card represents ~80% of loans) and implied U.S. Cards tax rate of ~40%. ROA denominator estimated from total loans ended totals. 6 American Express: Changed reporting method as of 1Q16. Figures are for U.S. Consumer segment only and exclude small business. 7 US Bank: Net Income attributable to Payments Services totaled $ 309M as of 4Q17, compared to $ 322M in 4Q16; Payments Services includes revenue from consumer credit cards, as well as commercial revenue and other sources. 8 A/R and PV for Retail Card unit only. 9 Loss rates and ROA include all of SYF’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for about 70% of total receivables. 10 Average Receivables.

     

    Q4 2017: U.S. credit card issuer snapshot fintech

      Paul Sammer, Management Consultant

    Q4 2017: U.S. credit card issuer snapshot fintechQ4 2017: U.S. credit card issuer snapshot fintech

     

     

     

     

    The post Q4 2017: U.S. credit card issuer snapshot appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
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