Major Credit Card Issuers

Most important credit card issuers

Bank of America is an example of a large credit card company. Capacity Snapshot of the US Credit Card Issuer Following a prolonged downturn from mid-2009*, the sector's weighting annual losses in the 4th Quarter of 2012 were flat. Purchasing volume rose both year-on-year and for the seventh year in succession over the previous three months. The credit card issuers are still struggling with the increase in accounts receivable, as the total figures fell for the last three months of the year (since the 4th since 2009 ) for the 4th year in a row.

In line with the seasonal trend of recent years, the sector's claims rose by 3.0% compared to the previous three months, but by 2.1% compared to the previous year. Some major issuers such as Wells Fargo, Discover and American Express recorded year-on-year debt recovery of over 4.0%. Chase, Citi and Bank of America, on the other hand, have recorded a decline in debt for each part of the year since the second quarters of 2009, but the decline seems to be leveling off as 2012 was the first year since the credit crunch in which none of the issuers mentioned above recorded double-digit falls in debt compared to the previous year.

Issuers' yields fell by 52 and 19 bps on both a quarter and an annual base. Much of the yearly decrease was caused by American Express, which had to bear quarter-on-quarter costs of business travel reorganization, adjusting the cardholder's premium reserves and resolving disputes with Visa.

Without American Express, issuers' yields would have remained virtually unchanged year-on-year. Increase in purchasing volume: Even though the increase in purchasing volumes seemed to have returned to normal by the end of the third quarter of 2012, the sector recorded 5% increase over the previous year. 6 per cent and, more significantly, 5.5 per cent year-on-year for seasonal factors.

Whilst the development of the purchasing volumes is almost always pushed by the biggest issuers, in this case Chase and American Express, economic expansion on an yearly basis was almost omnipresent in the 4th quarterly period. Chase and American Express both continually debate strategy, reward and new features that have outperformed the sector over the past five years.

Levelling the losses: Sector reports indicating that reversals of provisioning for credit losses are close to their end turned out to be the case as quarterly losses remained virtually unchanged. Lost rate trends for 2012, which are more favourable than 2011, continue as total yearly values have fallen by 105bps.

The year 2013, as already stated in our last Annual Review, will be an interesting one from a losses ratio point of view, as credit expansion may necessitate new commitments to accounts that further reduce the credit exposure range. * Note: General tendency; many losses increased at the beginning of 2010 temporary. Publisher of First Annapolis Interim and First Annapolis Analyses.

Note:1 Contains revenue from the acquisition of loans and volumes from businesses and own brands. Adjusted split between Citi Retail Service and Citi North American from the first quarter of 2012. Acquisition volumes comprise advance payments in the form of liquid funds. Section 3 Accounts receivable, purchasing volumes and net losses refer to US convenience store tickets. ROA after taxes adjusted to take only "Card Services"; US Consumers and Professional Activities into account.

U.S. card industry, small businesses, personal loan only. There are no advance payments in hand. The second quarter 2012 results reflect the effects of the completion of the HSBC deal on May 1, 2012, which resulted in approximately $28.2 billion of accounts receivable at year-end. Repayments and write-offs relate exclusively to the US card member lending transactions. Acquisition volumes relate to the U.S. Card Services, Consumer and Small Business Segments.

We define our net asset value as all claims (fees) and credits (revolving credits) of the card members. Contains only US claims and purchasing quantities. Wells Fargo began to report sales in the fourth quarter of 2013. ROA after tax represents Payment Services' operating revenues and weighted credit averages. Unrecognised credit-related revenues.

In a year-on-year comparison, Share One recorded an increase in purchasing volumes of 9.4% (excluding the HSBC portfolio), while sub-loans stagnated (year-on-year, without HSBC and expiring installment loans).

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