Credit services firm Capital One Financial Corp. (COF) reported Tuesday in a regulatory filing that its annualized net charge-off rate for the month of April increased month-over-month for U.S. credit cards as well as for international credit cards. The increased in charge-offs show that more customers are finding it difficult than earlier to pay off their credit card bills.
In a form 8-K filing with the U.S. Securities and Exchange Commission, the McLean, Virginia-based company stated that domestic credit cards' annualized net charge-off rate, which is the debt in percentage that is deemed uncollectible, reached 4.07 percent in April 2012, higher than 3.85 percent in March 2012.
The net charge-off rate measures the debt the company thinks can never be collected. The increasing charge-off rate is a sign that more number of customers are having trouble dealing with their credit card debt.
The company noted that the net principal charge-offs for domestic credit cards in April were $180 million, up from $170 million in March.
Delinquencies (non-payment of debt on due date) for more than 30 days reached $1.69 billion, representing a rate of 3.18 percent, down from March delinquencies of $1.73 billion, representing a rate of 3.25 percent.
During April, the company's average loans held for investment in U.S. credit cards were $53.0 billion and period-end loans held for investment were $53.24 billion, compared to $52.88 billion and $53.17 billion, respectively, in March.
Further, the company said its annualized net charge-off rate for the month of April was 6.00 percent for International Credit Cards, up from 5.50 percent in March.
For the month of April, international net principal charge-offs grew to $41 million from $38 million in the prior month. Delinquencies for more than 30 days were $421 million, with a rate of 5.01 percent, while it was $427 million, with a rate of 5.14 percent in March.
The company also said that average loans held for investment in international credit cards were $8.28 billion and period-end loans held for investment were $8.40 billion, compared to March's $8.31 billion and $8.30 billion, respectively.
Besides being one of the largest credit card issuers in the country, Capital One also provides auto loans.
Detailing about Auto Finance Metrics, the company said annualized net charge-off rate was 0.80 percent for the month of April, edging down from 0.81 percent in the month of March.
Net principal charge-offs for April in Auto Finance remained flat with last month at $16 million. Delinquencies for more than 30 days were $1.30 billion, with a rate of 5.39 percent, compared to March delinquencies of $1.21 billion, with a rate of 5.13 percent.
Auto Finance's average loans held for investment and period-end loans held for investment in April were $23.92 billion and $24.18 billion, respectively. In March, average loans held for investment were $23.18 billion and period-end loans held for investment were $23.57 billion.
COF closed Monday's regular trading session at $52.31, down $1.34 on a volume of 4.21 million shares, lower than the three-month average volume of 5.69 million shares.
For comments and feedback: editorial@rttnews.com