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In consumer loans, cards jump while delinquencies continue to rise

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In consumer loans, cards jump while delinquencies continue to rise

Consumer loans at U.S. banks and thrifts surged higher in the fourth quarter of 2017, helped by a larger-than-usual increase in credit card loans.

Total credit card loans hit $948.46 billion at year-end 2017, a new all-time high and a $70.61 billion increase since Sept. 30, 2017.

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Delinquent consumer loans are starting to account for a larger portion of total loan delinquencies. At year-end 2017, delinquent consumer loans accounted for 22.35% of total delinquencies, up 3.42 percentage points from a year earlier. Meanwhile, consumer loans as a percentage of total loans was 17.26% as of Dec. 31, 2017, up 18 basis points year over year.

Auto delinquencies accelerated, hitting 2.58% at the end of 2017, up 27 basis points quarter over quarter and 34 basis points year over year. Credit card delinquency increased by 14 basis points year over year to 2.47%, while "other" consumer loan delinquency fell by 47 basis points to 2.30%.

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Goldman Sachs Group Inc. grew its consumer loan portfolio by 79.0% last year, the largest percentage gain among banks and thrifts with at least $1 billion in consumer loans. According to a Jan. 17 earnings call, Goldman originated $2.3 billion in unsecured consumer loans last year via its online Marcus platform.

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Almost 17% of consumer loans at Santander Holdings USA Inc. were delinquent at the end of 2017, the highest delinquency ratio among all banks and thrifts with at least $1 billion in consumer loans. Educational Services of America Inc. — the parent of Tennessee-based SouthEast Bancorp Inc., which specializes in student loans — posted the second-highest delinquency ratio at 13.56%.

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S&P Global compiles consumer loan data based on call reports and Forms Y-9. Click here to see the aggregated data for commercial banks.

For a look at fourth-quarter loan growth at community banks, click here; for large banks, click here.