Citibank (NYSE: C) Reports Fewer Credit Card Debt Write-Offs in July

Citibank (NYSE: C) reported that its levels of uncollectable credit card debt and late payments remained elevated during the month of July, however, the numbers did slightly improve over the month of June.

The New York-based bank said in a regulatory filing on Monday that its write-off rate fell from 10.72% during the month of June to 9.10% during the month of July. Citi said that it had discovered a flaw in the way that it has been calculating net losses, which had caused some accounts to be counted twice. As a result, Citi restarted its losses back to the beginning of the year. Previously Citibank had reported a June write-off rate of 11.46%, much higher than the 10.72% it reported correctly in June. Citibank saw its write-off rate peak during the month of March at around 11%.

The trend of slowly declining write-off rates is common among many credit card issuers, which reported that consumers’ ability to repay their credit card debt is slowly improving. During the last year, banks have written off record levels of credit card balances and the charge-off rate across the industry hit about 10% during the first quarter of the year, according to data from the Federal Reserve. Before the financial crisis in 2007, the charge-off rate was just 3.8%.

Citi also said that fewer customers fell behind on their payments. For the month of July, payments past due by 30 days or more reached 8.32%, down from 8.58% in June.

Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc. In May 2010, the Company announced the creation of a new Collateral Management Services unit within its Securities and Fund Services business.

Shares of Citigroup, Inc (NYSE: C) traded down 1.19% during mid-day trading on Friday.