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23 Feb, 2022
By Rica Dela Cruz and Ronamil Portes
Credit card loans at U.S. banks ticked up year over year during the fourth quarter of 2021 even though the omicron variant of the coronavirus slowed consumer spending.
Such loans rose 6.0% year over year during the period, compared to a 1.2% increase in the previous quarter, according to data from S&P Global Market Intelligence. Loan growth in the U.S. banking sector picked up substantially in the quarter and is expected to improve notably in 2022.
Top banks by credit card loans
As of Dec. 31, 2021, Citigroup Inc. had the highest balance of credit card loans at $149.08 billion, followed by JPMorgan Chase & Co. at $137.95 billion.
Goldman Sachs Group Inc. reported an 82.4% year-over-year increase in credit card loans to $8.58 billion and logged consumer banking revenues of $376 million, reflecting higher credit card loan and deposit balances year over year. Credit card loans jumped 17.3% at American Express Co. to $70.50 billion, and "credit performance continued to be outstanding" while "card members are building loan balances at a modest pace," said Chairman and CEO Stephen Squeri during the company's earnings call.
Wells Fargo & Co. and U.S. Bancorp saw credit card loans jump 4.9% to $38.45 billion and 5.4% to $23.55 billion, respectively. On the companies' respective earnings calls, Wells Fargo President and CEO Charles Scharf said consumer credit card spending was up 28% from the fourth quarter of 2020, while U.S. Bancorp CFO Terrance Dolan noted continuing strong consumer loan growth in the 2021 fourth quarter.
Rising delinquent loans
The credit card delinquency rate fell during the 2021 fourth quarter, both on a quarter-over-quarter and a year-over-year basis. Delinquent loans, however, rose from the linked quarter by $1.41 billion to $22.56 billion. In December 2021, the average card delinquency rate for 30-plus days among the major banks slid 38 basis points year over year to 0.81%.
Continued loan growth optimism
In 2022, many banks are expecting to continue booking growth in overall loans. Bank of America Corp., whose credit card loans rose 3.6% year over year to $81.52 billion, anticipates continued momentum in lending to translate into a high-single-digit percentage increase in its loan portfolio this year. So far in the first quarter, loans across the bank's core businesses are increasing at a mid-single- to upper-single-digit annualized percentage rate, according to Chairman, CEO and President Brian Moynihan.
Truist Financial Corp., which saw a 4.1% drop in credit card loans to $3.42 billion during the 2021 fourth quarter, is also expecting loans to grow roughly in the mid-single-digit percentage range in 2022.
Meanwhile, the lending acceleration Wells Fargo saw in the quarter has stalled so far in 2022, but CFO Michael Santomassimo remains confident that growth will pick up as the year progresses.