JPMorgan sees FY card services NCO about 3.6%

JPMorgan sees FY card services NCO about 3.6%

July 02, 2025

In its latest earnings report, JPMorgan Chase & Co. (JPM) revealed that it expects its fiscal year (FY) card services net charge-off (NCO) rate to rise to approximately 3.6% [1]. This projection follows a period of normalization in consumer credit delinquencies, as reported by various financial institutions during the earnings season.

The company's Chief Financial Officer, Jeremy Barnum, noted that the 30-day delinquency rate in card services has returned to pre-pandemic levels, standing at 1.9% compared to 1.2% a year ago. The increase in delinquencies is attributed to a $1.5 billion credit cost, driven by loan growth in card services. Barnum also mentioned that the company expects the 2023 card net charge-off rates to hit roughly 2.6%, up from 1.4% last year [1].

This projection aligns with the broader trend observed across the banking sector. Citigroup, for instance, expects its branded card net charge-off rates to normalize to between 3% and 3.25% by the end of the year, while Bank of America's credit card net charge-off rate rose to 2.72% in the latest quarter, inching closer to its pre-pandemic rate of 3.03% [1].

Wells Fargo, Discover Financial Services, and Capital One also reported increases in delinquency rates, with Wells Fargo's 30-day delinquency rate rising to 2.7% and Discover's card charge-off rate increasing to 4% [1]. Capital One's domestic card business delinquency rate returned to pre-pandemic levels, standing at 4.3% in the third quarter [1].

These trends suggest that consumers may face increasing challenges in managing their credit card obligations, potentially leading to higher financial stress. PYMNTS reported that approximately two-thirds of consumers experience financial stress during the holidays, with many relying on credit products to navigate these periods [1].

As the economy continues to evolve, investors and financial professionals should closely monitor these trends to assess the potential impact on the banking sector and consumer credit markets.

References:
[1] https://www.pymnts.com/earnings/2023/earnings-season-shows-card-delinquencies-normalizing-but-what-comes-next/