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March 31, 2011updated 04 Apr 2017 1:08pm

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.

By Douglas Blakey

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.

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