Credit card loans rise for BNPL’s bread supplier, but so do net losses – Digital Transactions
Bread Financial Holdings Inc. released a performance update for July on Monday, saying it posted credit cards and other loans totaling $17.8 billion last month, an increase of 12%. from one year to the next.
The Columbus, Ohio-based provider of personalized payment, loan and savings solutions said average credit cards and other loans for the month were $17.4 billion, versus $15.5 previously. billion in July of last year.
But as cards and other loans increased during the period, net principal losses increased to $65 million from $55 million last year, creating a net loss ratio of 4.5 %, against 4.2% a year earlier. Bread attributes the increase in net principal losses and net loss rate to a planned transition of credit card processing services. Further information on the transition was not immediately available.
“Excluding the impact of the transition, which is timing-related, the net loss rate for July 2022 would have increased sequentially following seasonal trends,” the company said in a prepared statement.
Delinquencies over 30 days, less principal, totaled $810 million for July, compared with $518 million for the same period a year earlier. Overall, the company’s delinquency rate was 4.8%, down from 3.4% a year ago.
Bread, whose product line includes private label and co-branded credit cards, including the American Express Bread Cashback credit card, says its 30-plus day delinquencies minus principal for July, and therefore the rate of ‘delinquent itself, was also affected by the planned transition of credit card processing services. “We expect insignificant timing-related impacts to our delinquency rates for the remainder of the year,” the company said.
In addition to its card-based products, Bread offers loans in hot countries buy now, pay later businesses, installment loans and direct-to-consumer solutions. It also offers bread savings products, including savings accounts and certificates of deposit.