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 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.