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Highlights from the Q1 2015 Experian-Oliver Wyman Market Intelligence Report

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Understanding key changes in the consumer lending environment allows lenders to react quickly to develop more effective and profitable lending strategies. View Experian's overview of the latest consumer credit trends, including highlights from the Q1 2015 Experian-Oliver Wyman Market Intelligence Report to discover key trends impacting consumer credit decisions and learn about consumer behaviors in the context of economic trends from real estate, banking and automotive.

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Highlights from the Q1 2015 Experian-Oliver Wyman Market Intelligence Report

  1. 1. 1 ©2015 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. Unique insights on the consumer credit market Highlights from the Q1 2015 Experian–Oliver Wyman Market Intelligence Report
  2. 2. 2©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report Introduction Linda Haran Senior Director Experian Decision Sciences Alan Ikemura Senior Product Manager Experian Decision Sciences Today’s Speakers:
  3. 3. 3©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public.  2015 Economic Outlook  Origination and Delinquency Trends ► Mortgage ► Home Equity ► Bankcard ► Automotive Experian-Oliver Wyman Market Intelligence Report Agenda
  4. 4. 4©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Economic Trends
  5. 5. 5©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report 2015 Outlook  Unemployment levels continue to decline, to 5.4% in March  GDP increased nominally in the first quarter, by 0.2%  Housing market continues to show improvements -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 2Q1980 4Q1981 2Q1983 4Q1984 2Q1986 4Q1987 2Q1989 4Q1990 2Q1992 4Q1993 2Q1995 4Q1996 2Q1998 4Q1999 2Q2001 4Q2002 2Q2004 4Q2005 2Q2007 4Q2008 2Q2010 4Q2011 2Q2013 US Gross Domestic Product Percent change from preceding period
  6. 6. 6©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Mortgage Trends
  7. 7. 7©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report Q1 2015 Origination Trends | Mortgage $0 $100 $200 $300 $400 $500 $600 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 $416 $407 $436 $508 $537 $515 $555 $441 $317 $253 $350 $386 $374 $316 Mortgage origination volume (in $BNs) YoY increase of 25%
  8. 8. 8©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0 $50 $100 $150 $200 $250 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Midwest Northeast South Atlantic South Central West Experian-Oliver Wyman Market Intelligence Report Q1 2015 Origination Trends | Mortgage Origination volume by region (in $BNs)
  9. 9. 9©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 30-59 60-89 90-180 Mortgage delinquency rates as % of balances Experian-Oliver Wyman Market Intelligence Report Q1 2015 Delinquency Trends | Mortgage
  10. 10. 10©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report Q1 2015 Delinquency Trends | Mortgage 30+ dpd balance exposure (in $BNs) $7.0 $7.2 $7.4 $7.6 $7.8 $8.0 $8.2 $8.4 $8.6 $8.8 $9.0 $0 $100 $200 $300 $400 $500 $600 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 30+ dpd Exposure Balances O/S 30+ delinquency exposure continues to decline while balances see steady increases
  11. 11. 11©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0% 1% 2% 3% 4% 5% 6% 3 6 9 12 15 18 21 24 Months after origination 2008 Q2 2009 Q2 2010Q2 2011Q2 2012Q2 2013Q2 2014Q2 Experian-Oliver Wyman Market Intelligence Report Q1 2015 Delinquency Trends | Mortgage Vintage performance | 30+ delinquency rates as % of trades
  12. 12. 12©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Home Equity Trends
  13. 13. 13©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0 $5 $10 $15 $20 $25 $30 $35 $40 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Overall $20 $19 $23 $23 $22 $22 $28 $30 $28 $26 $34 $37 $35 $31 HELOC origination volume limits (in $BNs) Experian-Oliver Wyman Market Intelligence Report Q1 2015 Origination Trends | HELOC
  14. 14. 14©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Midwest Northeast South Atlantic South Central West Experian-Oliver Wyman Market Intelligence Report Q1 2015 Origination Trends | HELOC HELOC origination volume limits by region (in $BNs)
  15. 15. 15©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 30-59 60-89 90-180 HELOC delinquency rates as % of balances Experian-Oliver Wyman Market Intelligence Report Q1 2015 Delinquency Trends | HELOC
  16. 16. 16©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 3 6 9 12 15 18 21 24 Months after origination 2008 Q2 2009 Q2 2010Q2 2011Q2 2012Q2 2013Q2 2014Q2 Experian-Oliver Wyman Market Intelligence Report Q1 2015 Delinquency Trends | HELOC Vintage performance | 30+ delinquency rates as % of trades
  17. 17. 17©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Bankcard Trends
  18. 18. 18©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 $57 $57 $61 $59 $63 $68 $77 $71 $77 $81 $80 $77 Bankcard origination volume (in $BNs) Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Bankcard
  19. 19. 19©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $36.2 $6.8 $1.7 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Super Prime Prime Near Prime Subprime Deep Subprime Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Bankcard Bankcard origination volume by VantageScore (in $BNs) $0.11 $31.7
  20. 20. 20©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Super Prime Prime Near Prime Subprime Deep Subprime Q1 2014 Q1 2015 Average limit per new trade by VantageScore (in $s) -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% Super Prime Prime Near Prime Subprime Deep Subprime -0.6% -3.2% -17.5% -8.8% -25.9% Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Bankcard YoY % change in average limit by VantageScore $9,604 $5,209 $2,277 $966 $509 $9,543 $5,382 $2,497 $1,171 $686
  21. 21. 21©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 550 560 570 580 590 600 610 620 630 640 650 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Balances O/S Unemployment Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Outstanding Trends | Bankcard Bankcard balances (in $BNs) to Unemployment rate National Unemployment Rate: Bureau of Labor Statistics 6.7% $629 5.4% $596
  22. 22. 22©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 30-59 DPD 60-89 DPD 90-180 DPD Charge-offs Bankcard delinquency rates as % of balances Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Delinquency Trends | Bankcard 4.33% 1.28% 0.78% 0.48%
  23. 23. 23©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Auto Trends
  24. 24. 24©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. $0 $20 $40 $60 $80 $100 $120 $140 $160 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 $107 $116 $109 $115 $132 $135 $121 $127 $142 $146 $133 $134 Auto origination volume (in $BNs) $555BN +8% Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Auto Loans $515BN
  25. 25. 25©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 32% 31% 28% 28% 34% 33% 33% 29% 20% 21% 22% 25% 14% 15% 17% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 Q1 2013 Q1 2014 Q1 2015 Q1 Captive Auto Banks Credit Unions Finance Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Auto Loans Auto origination volume distribution by lender type
  26. 26. 26©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Finance Credit Unions Captive Auto Banks 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Super Prime Prime Near Prime Subprime Deep Subprime Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Origination Trends | Auto Loans VantageScore distribution of origination volume by financial institution (latest quarter) 21% 10%20%49% 42%23% 22% 12% 17% 51% 23% 9% 11% 26% 21% 37% 5% 0.4% 0.5% 0.3%
  27. 27. 27©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 30-59 60-89 90-180 Auto loan delinquency rates as % of balances 1.83%1.85% 1.77% Experian-Oliver Wyman Market Intelligence Reports Q1 2015 Delinquency Trends | Auto Loans 0.46% 0.22%
  28. 28. 28©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report Q1 2015 Summary  Economy slowed in the quarter, but steady ► Unemployment continues to decline ► GDP relatively flat; consumer confidence stable  Real estate showing signs of life ► 1st Mortgage: 25% increase YoY ► HELOC originations: still generating over $30BN/quarter ► Strong loan performance for both portfolios  Bankcard increases, but slower than prior quarters ► 8% YoY and 6% YoY for originations and balances, respectively ► Delinquency remains near all-time lows  Auto growing through continuing channel diversification ► 6% YoY growth; Credit Unions and Finance categories now represent over 40% of originations ► Delinquency back in check after slight upticks in previous quarters
  29. 29. 29©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report IntelliView  *NEW* Segment by Experian-exclusive scores  *NEW* Overlay key macroeconomic indicators  A unique combination of industry leading assets from Experian and Oliver Wyman  Benchmark your portfolio performance against peers and industry to gain a competitive advantage  Quickly and easily respond to what-if scenarios and run multiple iterations as needed IntelliView v1.2 now available!
  30. 30. 30©2015 Experian Information Solutions, Inc. All rights reserved. Experian Public. Experian-Oliver Wyman Market Intelligence Report VantageScore Overview VantageScore Credit Tiers Super prime 781-850 Prime 661-780 Near prime 601-660 Subprime 500-600 Deep subprime 300-499 VantageScore®, which is used by lenders and now available to consumers, is the first credit score developed cooperatively by Experian and the other national credit reporting companies. The VantageScore 3.0 model ranges from 300 - 850 with a high score = low risk. Note: Each lender determines credit quality tiers according to their own lending strategies. The credit tier breakdown is offered only as an approximation. VantageScore is a registered trademark of VantageScore Solutions, LLC.

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