Consumer Loan Delinquencies Lowest Since 2006
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Price: $462.11 -0.08%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 0.6%
Revenue Growth %: +11.2%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 0.6%
Revenue Growth %: +11.2%
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Consumer loan delinquencies hit their lowest level in six years in the second quarter, according to data from the American Bankers Association. The data showed delinquencies declined to 2.24 percent. This is the lowest reading since '06 and below the 15-year average of 2.4 percent.
The decline in the index might hide problems in specific categories of lending, including home equity loans and direct auto loans, which showed increased rates of delinquency.
Stocks of major credit card companies in the U.S. -- including Mastercard Incorporated (NYSE: MA), Visa, Inc. (NYSE: V), Discover Financial Services (NYSE: DFS) and American Express Company (NYSE: AXP) -- have all shown strong returns this year. The bullish sentiment might have more to do with a global secular trend away from cash than a decline in delinquency rates. However, if debt continues to fall and if this results in banks handing out more credit cards, it could create another leg up for the sector.
The decline in the index might hide problems in specific categories of lending, including home equity loans and direct auto loans, which showed increased rates of delinquency.
Stocks of major credit card companies in the U.S. -- including Mastercard Incorporated (NYSE: MA), Visa, Inc. (NYSE: V), Discover Financial Services (NYSE: DFS) and American Express Company (NYSE: AXP) -- have all shown strong returns this year. The bullish sentiment might have more to do with a global secular trend away from cash than a decline in delinquency rates. However, if debt continues to fall and if this results in banks handing out more credit cards, it could create another leg up for the sector.
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