Credit Card Issuers Poised to Beat Loss Forecasts, Goldman Sachs Says

Goldman Sachs reported that credit card issuers are likely to exceed loss forecasts in the third quarter. According to the firm, August's credit metrics for card issuers showed stable delinquency trends and net charge-offs that performed better than expected.

Card 30-day-plus delinquencies came in at 3.57%, up 3 basis points month-over-month but below the expected 3.63%. Net charge-offs decreased 12 basis points month-over-month to 4.33%, outperforming 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. Month-over-month loan growth of 0.7% exceeded typical seasonal patterns of 0.2%. Among individual issuers, Bread Financial Holdings () saw delinquencies rise 1 basis point to 5.36%, while Capital One Financial () increased 9 basis points to 3.57%, in line with expectations.

Quarter-to-date trends suggest net charge-offs are running below seasonal patterns. Goldman Sachs noted that for issuers to meet consensus expectations, losses would need to increase 60 basis points in September versus typical seasonality of 10 basis points, positioning the group for potential outperformance.