May ‘26 Master Trust: Continued Resilience

Research evidence excerpt

May ‘26 Master Trust: Continued Resilience

Update

June 17, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMConsumer Finance | North America Jeffrey Adelson, CFA

Equity Analyst

May '26 Master Trust: Jeff.Adelson@morganstanley.comJoseph Leeman +1 212 761-1761

Research Associate

Joseph.Leeman@morganstanley.com +1 212 761-4381

Continued Resilience

Consumer Finance

North America

Credit trends were constructive on average, with better-than- Industry View In-Line

expected DQs, in-line NCOs, and continued loan growth

reacceleration. We see higher tax refunds as a key tailwind here,

though some management teams are pointing to broader

consumer resilience as more of a driver.

Managed Results: Across 4 card issuers reporting managed data (100% of card

receivables):

1. Card delinquency rate better than seasonality across all names. Managed

card delinquency rates were on average 12bps below typical May

seasonality, declining 10bps m/m vs. 2014-2019 average of increasing 2bps

m/m. BFH reported the largest beat relative to seasonality in May, with DQs

declining 10bps m/m vs typical seasonality of up 12bps m/m. The only area

that didn't outperform seasonality was AXP's small business card, where

DQs were down 10bps m/m or in-line with seasonality (note AXP US

Consumer card DQs declined 10bps or better than flat seasonality). On a y/y

basis, DQ rate declined another -24bps y/y, in-line with the prior month's -

25bps y/y decline. COF was the only name of 4 to report a worse second

derivative (i.e. slowing in the rate of y/y improvement), with DQs down

38bps y/y versus prior 51bps y/y.

2. Card net charge-off rate roughly in-line with seasonality. On average,

NCOs improved 13bps m/m, about in-line with the average 16bps decline

we've seen historically in May.