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Credit Card Profitability Plummets

By PaymentsJournal
August 30, 2018
in Credit, Truth In Data
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  • Credit card banks Return on Assets fell from 4.94% (2014) to 3.37% (2017)
  • The fall in ROA is forecasted to continue down to 2.4% in 2020
  • Meanwhile, commercial bank’s ROA holds steady around 1.3%
  • Write-offs for top 100 banks moved from 2.92% (Q4 2016) to 3.51% (Q4 2017)
  • 59 bps loss in credit write-offs means an $8 to $10 billion revenue hit

Data for this episode of Truth In Data provided by Mercator Advisory Group’s report In Search of a Profit: Falling ROA Sets the Stage for 2019 and Beyond, by Brian Riley

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