Fewer Americans fell behind on credit card charge-offs in June, with delinquencies at their lowest this year at major U.S. card lenders, but the results did not stem concerns about the economic recovery.
Credit card loss rates have improved steadily since the beginning of the year, signaling that banks should have to write off less debt as uncollectable.
But at least one major lender, Capital One Financial, set off concerns Thursday that its recovery could be slowing, even as its credit losses remain elevated by historical standards. While delinquency rates, an early warning sign of future losses, were at their lowest at most lenders, Capital One's delinquency rate barely inched down to 4.79 percent in June from 4.8 percent in May.
The shares of most major credit card lenders fell around 2 percent in morning trading, but Capital One was down 4.76 percent at $42.41.
The improvement in delinquency rates could slow at other lenders over the summer, said Michael Taiano, an analyst at Sandler O'Neill.
Consumers usually have a little more money to pay their bills during the spring because of tax refunds.
But "June's a little bit of a tricky month, because you get that effect wearing off. So you could see delinquencies come in maybe higher than what some people are expecting," he said.
JPMorgan Chase's Chief Executive Jamie Dimon sparked more industry pessimism Thursday, as his bank reported second-quarter earnings. Despite beating expectations, Dimon told investors it was "too early to say" how much more improvement he expected in the company's consumer lending businesses.
Capital One's annualized net charge-off rate for U.S. credit cards fell to 9.28 percent in June from 9.48 percent in May. Charge-offs are debts a company believes it will never collect.
Discover Financial Services said in a regulatory filing that its credit card delinquency rate fell to 4.81 from 4.95 in May. Its charge-off rate fell to 8 percent from 8.82 percent.
JPMorgan Chase's delinquency rates fell to 4.13 percent in June from 4.22 percent in May. Its charge-off rates for the month also fell, to 8.38 percent from 8.95 percent.
Bank of America said its accounts more than 30 days past due fell to 6.16 percent in June from 6.39 percent in May. Its charge-off rates improved more dramatically, to 11.98 percent from 13.33 percent in May.
American Express , whose credit losses recovered sooner than its competitors, continued to lead the recovery. Its charge-off rate fell to 5.7 percent in June from 6.3 percent in May. The company's delinquencies also fell, to 2.7 percent from 2.9 percent.
© 2021 Thomson/Reuters. All rights reserved.