Early-stage delinquencies ticked up at a handful of card issuers in March, which could be a bad sign for future credit trends.
The latest trust data from the major issuers, released Thursday, did show some improvement. However, a slight increase in the rate of loans 30 to 59 days past due at JPMorgan Chase & Co., Discover Financial Services and Bank of America Corp. was concerning to SunTrust Robinson Humphrey analyst John Stilmar. Delinquencies are considered a reliable indicator of future losses.
"March's trust performance was frankly a bit disappointing," Stilmar wrote in a research note. On a seasonal basis, March credit data typically shows an improvement, as consumers use their tax rebates to pay down debt, he said.
However, total delinquencies were down across the board.
The early-stage delinquency rate in JPMorgan Chase's credit card portfolio rose 4 basis points, to 1.13%, after four months of declines. Chargeoffs also rose, by 30 basis points, to 9.51%. (JPMorgan Chase has previously said that it expected an increase in first-quarter chargeoffs, after a payment holiday last year reduced losses in the fourth quarter.)
At Discover, early-stage delinquencies rose 7 basis points, to 1.42%, breaking a five-month improvement streak. And at B of A, the rate of loans 30 to 59 days overdue rose 2 basis points, to 1.71%. Both lenders, however, reported a drop in the chargeoff rate. Discover's fell 60 basis points, to 8.51%, while B of A's declined 97 basis points, to 12.54%.
Capital One Financial Corp.'s chargeoff rate rose 68 basis points, to 10.87%, while total delinquencies slipped 21 basis points, to 5.30%. American Express Co. said its chargeoff rate rose a second straight month — after nine months of declines — to 7.5%, from 7.4%. Delinquencies slipped 30 basis points, to 3.3%.