Credit Card Issuers Poised to Beat Loss Forecasts: Goldman Sachs

Goldman Sachs reported that credit card issuers saw stable delinquency trends and net charge-offs that outperformed expectations in August. The data suggests companies will exceed loss forecasts for the third quarter.

The report showed 30-day-plus delinquencies at 3.57%, up just 3 basis points month-over-month but below the expected 3.63%. Net charge-offs decreased by 12 basis points to 4.33%, beating long-term expectations of a 6 basis point decline.

Loan growth reached 4.2% year-over-year at the end of the period, improving from 3.9% in July and exceeding typical seasonal patterns of 0.2%. Individual issuers such as Bread Financial Holdings saw delinquencies rise to 5.36%, while Synchrony Financial remained flat at 4.20%.

Among other key metrics, Capital One Financial's net charge-offs increased by 4 basis points to 4.16%, while American Express fell by 12 basis points to 1.84%. Goldman Sachs noted that for issuers to meet consensus expectations, losses would need to increase by 60 basis points in September versus typical seasonality of 10 basis points.