ANALYSIS: Consumer Loan Charge-offs Jump 27% in Q3
November 28 2007
Source: CreditandCollectionsWorld.com and SourceMedia, Inc.
Net charge-offs of loans to individuals – for household, family and other personal expenditures – at all FDIC-insured institutions through the first nine months of 2007 totaled roughly $17.7 billion, up $3.7 billion or 27% from more than $13.9 billion during the first nine months of 2006.
The recovery rate on these charged-off non-credit card consumer loans fell to 19.9% year to date in 2007, compared with 24.3% throughout the same period of 2006. FDIC-insured financial institutions held total loans to individuals of $1.01 trillion during the third quarter, up 6% from holdings of $954.8 billion in the same period last year, according to the FDIC’s Quarterly Banking Profile, released Wednesday.
Consumer loans that were 30-89 days past due during the third quarter exceeded $20.1 billion, up 18% from roughly $17.1 billion in the same quarter last year. Consumer loans that were 90 or more days past due totaled $9.3 billion, increasing more than 2% from around $9.1 billion in last year’s third quarter.
Loans to individuals in nonaccrual status, that is, loans considered an impaired asset and in a stage preceding write-off, totaled $2.7 billion, up 29% from $2.1 billion a year ago, FDIC statistics show.