CREDIT CARD COPANIES SHARES FALL ON LOSS CONCERNS

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Credit card companies shares fall on loss concerns
Fri Mar 13, 2009 1:02pm EDT

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NEW YORK (Reuters) - The shares of credit card companies American Express Co (AXP.N), Capital One Financial Corp (COF.N) and Discover Financial Services (DFS.N) fell on Friday, squeezed by higher credit losses concerns after a week of strong gains.

"We haven't seen yet the worst in the deterioration of the credit portfolios," said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management.

American Express, a Dow component and the largest U.S. credit card company by sales volume, fell 8.4 percent to $12.05 in afternoon trading on the New York Stock Exchange, after rising 20 percent this week.

Capital One stock was down 12 percent at $11.72, after jumping 43 percent earlier this week and Discover shares fell 15 percent to $5.62.

American Express and Capital One are expected to report next week an increase in charge-off rates -- debts the card companies believe they will never be able to collect -- during February, while Discover is seen posting a sharp drop in its quarterly earnings, hammered by higher credit losses.

NOTE: the american express and the capital of the one are expected to report by next week, they will never be able to collect-- during february.

Analysts estimate credit card charge-offs could rise to between 9 percent and 10 percent this year from 6 percent to 7 percent at the end of 2008. In that scenario, such losses -- on an industrywide basis, including banks and specialty finance companies -- could total $75 billion in 2009.

(Reporting by Juan Lagorio, Editing by Andre Grenon)

© Thomson Reuters 2009 All rights reserved

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