Capital One credit-card defaults rise in May (AP)
Mon, 15 Jun 2009 14:22:00 Etc/GM
In a regulatory filing, the McLean, Va.-based company said the annual net charge-off rate, or the percentage of loans the company believes won't be repaid to total managed loans, rose to 9.41 percent from 8.56 percent in April.
Like in April, the May results reflect a change in the way the company processes bankruptcies. Due to an increase in volume in bankruptcies, Capital One extended the processing time so that bankrupt accounts are charged off within 30 days, instead of the previous 2- to 3-day processing time.
The change improved the charge-off rate by 50 basis points, the company said. Without the new processing guidelines, the charge-off rate would have been nearly 10 percent.
The rate for loans at least 30 days delinquent improved for a third straight month. The delinquency rate fell to 4.9 percent from 5.04 percent.
In international card operations, the charge-off rate jumped to 9.77 percent from 8.91 percent in April, while the delinquency rate increased to 6.69 percent from 6.43 percent.
In Capital One's auto-loan unit, the charge-off rate rose slightly to 3.62 percent from 3.46 percent. The delinquency rate jumped to 8.59 percent from 7.81 percent in April.
Capital One issues MasterCard and Visa credit cards. Like nearly all lenders, Capital One has seen defaults on its cards spike as rising unemployment and shrinking personal wealth hinder consumers' ability to pay off their debts.
Capital One shares slipped 17 cents to $23.77 in morning trading.
source: http://biz.yahoo.com/ap/090615/us_capital_one_delinquencies.html?.v=1