Credit Card Profitability Plummets

• 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