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Zacks Analyst Blog Highlights: American Express Co., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Capital

Posted on: Wed, 18 Nov 2009 17:00:00 EST

Symbols: AXP, C, BAC, JPM, COF

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Here are highlights from Tuesday's Analyst Blog:

Mixed News for Credit Card Issuers

U.S. credit card issuers have reported a drop in the default rate for
October, though delinquencies are rising as a result of continuing
stress on consumers. While a decrease in the default rate reflects a
decline in late payments in the first half of the year, the increase in
delinquencies is bad news for the sector as it implies that the
companies could experience more charge-offs in the coming quarters.

Consumers remain under stress as a result of the weakness in the housing
market, combined with job losses. Recently, Fitch has also expressed its
concern about the credit card issuers in the U.S. Fitch expects U.S.
credit card issuers' earnings to remain challenged over the near term as
a result of soaring unemployment, bankruptcies and losses.

The default rate (or charge-off rate) has improved in October from the
prior month. For American Express Co. (NYSE: AXP | Quote | Chart | News | PowerRating)
it was down 60 basis points (bps) to 7.8%, while for Bank of America
Corp. (NYSE: BAC | Quote | Chart | News | PowerRating)
the rate dropped 103 bps to 13.22% in October. The situation was the
same for JPMorgan Chase & Co. (NYSE: JPM),
Citigroup Inc. (NYSE: C | Quote | Chart | News | PowerRating)
and Capital One Financial Corp. (NYSE: COF).
JPMorgan's default rate declined 10 bps to 8.02%, Citigroup's defaults
fell 136 bps to 8.79% and Capital One's charge-off rate decreased 73 bps
to 9.04%.

However, we are concerned about the rise in delinquencies which
increased 34 basis points to 5.72% in October at Capital One, 26 bps to
4.95% at JPMorgan and 6 bps to 7.59% at Bank of America. However,
delinquencies remain unchanged at American Express.

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For full details on American Express Co (AXP) AXP. American Express Co (AXP) has Short Term PowerRatings at TradingMarkets. Details on American Express Co (AXP) Short Term PowerRatings is available at This Link.

For full details on Citigroup (C) C. Citigroup (C) has Short Term PowerRatings at TradingMarkets. Details on Citigroup (C) Short Term PowerRatings is available at This Link.

For full details on Bank Of America Corp (BAC) BAC. Bank Of America Corp (BAC) has Short Term PowerRatings at TradingMarkets. Details on Bank Of America Corp (BAC) Short Term PowerRatings is available at This Link.

For full details on JPMorgan Chase and Co. (JPM) JPM. JPMorgan Chase and Co. (JPM) has Short Term PowerRatings at TradingMarkets. Details on JPMorgan Chase and Co. (JPM) Short Term PowerRatings is available at This Link.

For full details on Capital One Financial Cp (COF) COF. Capital One Financial Cp (COF) has Short Term PowerRatings at TradingMarkets. Details on Capital One Financial Cp (COF) Short Term PowerRatings is available at This Link.

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