Piper Jaffray Comments On Improving Credit Trends

Piper Jaffray tracks master trust loan data from primary credit card issuers which combined account for roughly 37% of revolving credit outstanding. It monitors American Express AXP, Capital One COF, Discover Financial DFS, Citigroup C, Bank of America BAC, JP Morgan Chase JPM, and Alliance Data Systems ADS, as well as several retailer and private label issuers. Overall, Piper found the credit card trust data for the industry as generally in-line with its expectations considering seasonality. December was the first month since the downturn that Piper felt essentially all companies had solidly improving credit, margin, payment and loan trends. In Piper Jaffray's opinion, AXP is the clear leader in most relevant metrics, followed by DFS, COF, Chase, Citi and ADS. The performance of the BofA portfolio, while improving, is lagging in many areas, especially with an unusually low payment rate. Total receivables in the Trusts for the issuers Piper tracks declined 15.2% y/y and 1.1% m/m to $289B. Total charge-offs improved 30 bps m/m in March despite a negative denominator effect. Total delinquencies improved 27 bps m/m and were negatively impacted by the denominator effect.