Ten Largest Card Lenders Account For More Than 70% Of The U.S. Card Industry

by Trefis Team
+20.33%
Upside
97.23
Market
117
Trefis
COF
Capital One
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The U.S. card industry crossed the $1 trillion mark for the first time in Q3, as increasing penetration of credit cards in the country coupled with the overall shift towards cashless transactions helped card balances jump by a strong 5.3% over the last twelve months. While each of the ten largest U.S. card lenders benefited from this trend, JPMorgan consolidated its position as the market leader with a market share of more than 14%. It should be noted that the card lending industry in the U.S. is extremely consolidated, with the four largest issuers garnering a market share of almost 47%, and with the top 10 players accounting for well over 70% of the entire market.

Capital One and Synchrony stand out among these lenders with a year-on-year growth figure of around 10% – nearly double the figure for the overall industry. This can be primarily attributed to their card-focused business model.

We maintain a price estimate of $96 for Capital One’s shares, which is about 10% ahead of the current market price

Figures for individual card issuers at the end of Q3 2017 are taken from their annual SEC filings. It should be noted that the figures for American Express and Discover here capture the outstanding balances for cards they issued directly, not those that are issued for their payment networks by other card lenders. The total card debt figure is as compiled by the Federal Reserve here.

The chart below captures Capital One’s total credit card portfolio (which also includes its international card portfolio). You can see how changes to Capital One’s card portfolio affects our price estimate for the bank by modifying the chart below.

See Trefis analysis for U.S. Bancorp | Wells Fargo | JPMorgan ChaseBank of America | Citigroup | Capital OneAmerican Express | Discover | Barclays

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