Citibank posts dip in credit card charge-offs for April; delinquencies also decline

Citibank credit card charge-offs decline in April

NEW YORK — Citibank said Monday that its credit card charge-offs dipped slightly in April and fewer customers made late payments on cards — suggesting that the bank will see fewer defaults as the year progresses.

The New York-based bank said net credit losses edged down to 11.23 percent in April, from 11.55 percent in March. Citibank’s rate still was higher than all major issuers except Bank of America, which reported an increase in its charge-off rate to 12.71 percent.

Card companies write off loans that are 180 days past due, when it’s assumed the balances can’t be collected.

In the past year, the industry has written off a record amount of loans as customers struggled to pay off debt. The overall charge-off rate dipped slightly to 9.5 percent in the fourth quarter of 2009, according to the Federal Reserve, down from a high of 10.17 percent in the third quarter. That is still well above the rate of 3.8 percent seen in the second quarter of 2007, before the recession began.

With the economy stabilizing and most bad loans off the books, the rate of late payments, an indicator of future default, has been easing. Some observers attribute at least some of the drop to credit card regulations that took effect in February. But high unemployment remains an obstacle to many consumers paying down their debt on time.

Citibank said its rate of payments 34 or more days past due was 5.85 percent April, down from 6.06 percent in March.

Shares of the bank’s parent company, Citigroup Inc., fell 12 cents, or 3 percent, to close Monday trading at $3.86.