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    Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

    Top Stories

    Posted By Gbaf News

    Posted on April 9, 2014

    Featured image for article about Top Stories

    Nearly half of respondents forecast an increase in credit card delinquencies, the highest level since 2011

    Risk appears to be reemerging as a concern in the consumer credit sector as the economic recovery moves into its fifth year. The latest quarterly survey of U.S. and Canadian bank risk professionals found expectations for delinquencies on auto loans and credit cards, as well as total delinquencies on all consumer loans, to be at their highest levels since Q4 2011.

    In the survey from FICO (NYSE:FICO), a leading predictive analytics and decision management software company, 44 percent of respondents expected delinquencies on credit cards to increase during the next six months, while 35 percent of respondents said delinquencies on car loans would increase. Among those polled, 43 percent expected the total number of delinquencies on all consumer loans to increase.

    Andrew Jennings

    Andrew Jennings

    This is the fourth consecutive quarter in which respondents’ pessimism has increased with regard to delinquencies on auto loans and credit cards. However, the survey, conducted for FICO by the Professional Risk Managers’ International Association (PRMIA), found re-leveraging is likely to continue and perhaps accelerate.

    “We’ve seen concerns about delinquencies creeping up for a few quarters,” said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. “This can be interpreted as a healthy sign after lenders spent much of the past five years constricting credit availability and being risk-averse. These numbers mean more people are gaining access to credit, but we need to keep a close eye on the risk levels of these new loans. If delinquencies reach an uncomfortable level, we may see lenders pull back again.”

    In the survey, 65 percent of bankers expected average balances on credit cards to increase over the next six months. That is the highest percentage of respondents expecting balances to increase in the survey’s four-year history. In addition, 61 percent of those polled expected the amount of new credit requested by consumers to increase, which is the second-highest figure ever recorded for that question.

    Small Business Lending Seen as Stable

    Survey respondents indicated lending for small businesses would remain on its current trajectory and possibly improve. Ninety-four percent of those polled expected the amount of credit requested by small businesses to remain steady or increase over the next six months. Eighty-four percent of respondents believed the amount of credit extended to small businesses would remain steady or increase. And 74 percent of respondents expected the supply of credit for small business loans to satisfy demand.

    A detailed report of FICO’s quarterly survey is available at http://alturl.com/tb67q. The survey included responses from 229 risk managers at banks throughout the U.S. and Canada in February 2014. FICO and PRMIA extend a special thanks to Columbia Business School’s Center for Decision Sciences for its assistance in analysing the survey results.

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