OREANDA-NEWS. Fitch Ratings says UK credit card asset performance further improved during 3Q15. This is despite the three-months rolling (3MA) charge-off index increasing to 3.0% (2.8% in 2Q15) and the payment rate index falling slightly to 22.0% (from 22.3% in 2Q15). However, both performance indicators were affected by a one-off event: the former by accelerated charge-offs in the Gracechurch trust and the latter by the removal of the Arran trust after repaying the last Fitch-rated notes in August. Adjusted for these events, both 3MA performance measures would have improved by 50bp throughout 3Q15. The 3MA gross yield index increased slightly in the quarter, but the overall trend has been downwards since 2012.

Credit card purchases were 6% higher in September than a year ago thanks to improved consumer confidence, very low inflation and rising wages. Fitch notes that intense competition among lenders and the rising balances of unsecured consumer debt may start to weigh on the currently strong performance of UK credit cards, but based on the solid macroeconomic outlook and no near term threat to household finances from rising interest rates it maintains its stable outlook for the sector.

In 3Q15, there was no new rated issuance backed by UK credit card receivables.

The full report, entitled 'Credit Card Index - UK 4Q15', is available at www.fitchratings.com.

Fitch has also updated "ABS Compare", an Excel tool, providing easy access to the agency's surveillance and index data on European consumer and credit card ABS transactions (see "ABS Compare" on www.fitchratings.com).