You are here: Home » Reuters » News
Business Standard

Credit card losses set to climb industrywide - JPMorgan's Smith


By Dan Freed

(Reuters) - U.S. losses are likely to rise at Chase & Co and across the industry, Gordon Smith, head of the bank's consumer businesses, said at a on Tuesday.

Smith said the largest U.S. is being "surgical" in determining where to tighten credit standards but he added that lenders industrywide ought to be leaning towards stricter lending standards rather than looser ones.

JPMorgan's earnings have shown rising sales volumes as well as weakening credit trends in its business, consistent with other lenders. A recent investor presentation by the said Chase Card has only modest exposure to borrowers with FICO scores lower than 660.

A Fitch Ratings report last month said loss rates, which have already been climbing, are likely to rise for several more quarters as loan growth has increased, driven partly by lower credit standards.

Smith said Tuesday rising losses should be no cause for alarm, but are to be expected after an extended period of historically low loss rates.

"I've called this now actually for almost two years so that nobody would be surprised," he said. However, he added, "people still seem to be surprised that we are at the end of that cycle."

(Reporting by Dan Freed; editing by David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)