Feb 6 (Reuters) - (The following statement was released by the rating agency)
In its latest quarterly UK Credit Card Index, Fitch Ratings notes that UK credit card ABS performance further improved in 4Q13 with the three-months rolling (3MA) charge-off and delinquency indices falling below their historical low levels reached in 3Q13. Payment rates also continued to increase while the 3MA gross yield index decreased.
Although the metrics were slightly affected by the accounts addition to the Turquoise trust in December, the performance also reflects the accelerating recovery of the British economy. While the unemployment rate fell to 7.1% in November and GDP expanded by 0.7% over 4Q13, the 3MA charge-off and 60-180 delinquency indices improved to 3.6% and 1.4%, respectively, compared with 4.2% and 1.5% in 3Q13.
Fitch also notes the increasing share of cardholders who repay their outstanding balance in full at the end of the month, making the most of reward and cashback offers.
We have upgraded our growth forecasts for the UK, to 2.3% for both 2014 and 2015 (compared with 2.2% previously forecast). Consequently, our outlook for the sector remains stable.
Penarth and Gracechurch were the only trusts issuing during 4Q13 As of December, the Penarth and Gracechurch trusts represented 22.1% and 42.8%, respectively, of the GBP28.5bn collateral tracked by the index.
The full report, entitled ‘Credit Card Index - UK 4Q13’, is available at www.fitchratings.com or by clicking on the link above.
Link to Fitch Ratings’ Report: Credit Card Index - UK 4Q13