FICO releases positive US quarterly credit survey

US bankers are feeling
increasingly optimistic about the next six months and expect
delinquencies for credit cards, auto loans and small business loans
to decline.

The quarterly Survey
of Bank Risk Professionals, conducted for global analytics and
decision management technology vendor FICO, also reported that
credit demand and supply appears to be nearing
equilibrium.

Although the report,
released on 30 March, is the most upbeat quarterly survey of the
past year, the findings flag-up ongoing gloom about the retail home
loans sector in the US.

42 percent of
respondents said that delinquencies for mortgages lines will
increase over the next six months, versus 18% who forecast a
decline.

For home equity lines,
40% of bankers expected delinquencies to rise against 21%
forecasting a reduction.

Positive metrics
included:

• Credit card delinquencies: by a margin of
  36% to 28%, survey respondents expected credit card delinquencies
  to fall;
• Auto loans: 37% forecast a reduction in
  delinquencies; 24% forecast an increase;
• Small business loans: bullish respondents
  outvoted bearish bankers by a margin of 36% to 31%, and
• Credit supply and demand: 53% of
  respondents expect the amount of credit requested by consumers to
  increase, 50% expected the amount of consumer credit extended by
  lenders to increase.  That is the closest these numbers have
  been in the past year.

Andrew Jennings, chief
analytics officer at FICO and head of FICO Labs, said:

“These results are the
latest sign that America’s economic recovery appears to be gaining
momentum.

“This is the first time
since we initiated the survey a year ago that we have seen more
bankers expecting delinquency rates to decline rather increase.
This is consistent with other data, such as a decline in the
unemployment rate and falling consumer indebtedness that indicate
consumer health is improving.”

The survey was conducted
for FICO by the Professional Risk Managers’ International
Association and included responses from 216 risk managers at banks
throughout the US in February.

Sign up for our daily news round-up!

Give your business an edge with our leading industry insights.

Sign up