TEXT-Fitch UK credit card index Q3: asset performance improved further
Link to Fitch Ratings' Report: UK Credit Card Index Q312Nov 12 - Fitch Ratings has published its quarterly UK Credit Card Index report - UK Credit Card Index. Overall the performance of UK credit card trusts has improved in Q312, with charge-off rates and delinquency rates decreasing even further from their historic low level reached in Q212. Given the decreasing delinquencies and signs of improvements in the UK economy, the charge-off index is expected to stay stable or improve slightly in the short-term. Yield and payment rates are expected to remain stable Driven by a significant increase in the charge-off rate reported by CARDS II for September, the value for September 2012 increased by 1.2 percentage points to 6.7%. The three-months rolling charge-off index however improved to 5.8% in Q312 from 6.0% in Q212. The three-months rolling 60-180 Day Delinquency Index decreased to 1.9% in Q312 from 2.1% the quarter before, testing its lowest level seen since index inception in 2002. The Fitch Gross Yield Index value for September 2012 was 21.0%, representing a quarter-on-quarter increase of 1.6%. The Fitch Monthly Payment Rate Index remained stable to 17.2% within the corridor of 16.0%-19.0% as it has broadly been in the past 10 years. Fitch's outlook for UK credit card transactions is stable, reflecting among other factors, the down-trend in delinquencies, high-but-stable unemployment levels and flattening personal insolvencies in the UK. The Penarth trust removed GBP403m of principal receivables in October and added a pool of around GBP650m of principal balances from an eligible pool of Lloyds TSB receivables. Barclays added 105,000 accounts into the Gracechurch trust to increase the collateral balance by GBP422m. The only issuance out of the Fitch-rated trusts in Q312 was the GBP1.3bn retained issuance from the Arran trust of RBS. Overall the index composition did not change over the past quarter and the value of collateral tracked by the Index remained stable at GBP27bn at the end of Q312. The full report, entitled Credit Card Index - UK - Q3 2012, is available at www.fitchratings.com. Additional information is available at www.fitchratings.com.