December remittance reports showed credit performance was somewhat mixed across securitized marketplace consumer loan pools during the November collection period. On one hand, the month-over-month (MoM) change in annualized net losses (ANL) and 30+ day delinquency rates within KBRA’s Tier 1 Index was quite modest, with net losses rising just 8 basis points (bps) and delinquencies falling 2 bps during the month, coming in at 7.49% and 3.35%, respectively. On the other hand, ANLs and 30+ delinquencies in KBRA’s Tier 2 Index meaningfully rose, increasing 151 bps to 16.41% and 31 bps to 6.29%, respectively.
Meanwhile, year-over-year (YoY) comparisons remain unfavorable in both indices, as KBRA’s Tier 1 ANL and delinquency metrics rose 417 bps and 138 bps, respectively, while the Tier 2 Index posted a YoY rise of 884 bps and 295 bps.
With elevated inflation, rising interest rates, softer labor markets, and weaker consumer credit fundamentals, KBRA expects weaker index readings in 2023.…
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