AMEX warning resulted from investment loss,not bad loans. FYI Providian bad debt currently just under 5%, MBNA at about 4%.Nextcard about 3%
Correct vj and that is bad news for banks. You can also throw Bankone in the mix {First USA }. CC portfolio profits really get whacked as default rates get to the 4% level. MBNA is a suprise because they were though to have a stronger level of consumer debt than others. First Wachcovia announce last weeek they are leaving the cc business. They are negoating the sale of thier cc portfoilio and admit to $100 million worth of chargeoffs in 2000. They say they can't generate the volume growth to be a leader. BTW, Capitol One defaults are approaching 4%. I guess if anyone wants to make the "run for the border" and just stop paying, you won't raise any eyebrows. As the economy softens and layoffs rise, badconsumer debt won't be new news.
