8-K: American Express Discloses Delinquency and Write-Off Rates for U.S. Consumer and Small Business Card Loans

American Express has released delinquency and write-off statistics for its U.S. Consumer and Small Business Card Member lending portfolios for the months ended July, August, and September 2024, showing a slight fluctuation in these metrics.

Summary

• American Express has provided delinquency and write-off statistics for its U.S. Consumer and Small Business Card Member loan portfolios.
• For U.S. Consumer Card Member loans, total loans were $86.8 billion as of September 30, 2024, with a 1.4% 30-day past due rate and a 2.1% net write-off rate for the three months ended September 30, 2024.
• U.S. Small Business Card Member loans totaled $29.9 billion as of September 30, 2024, with a 1.5% 30-day past due rate and a 2.2% net write-off rate for the three months ended September 30, 2024.
• The total combined U.S. Consumer and U.S. Small Business Card Member loans were $116.7 billion as of September 30, 2024.
• The report also includes data for the American Express Credit Account Master Trust, showing an annualized default rate of 1.3% for the period of September 1, 2024, through September 30, 2024.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly negative due to the relatively high write-off rates, but the stability in delinquency rates prevents a more negative outlook.

Positives

• The delinquency rates for both U.S. Consumer and Small Business Card Member loans remained relatively stable across the three months reported.
• The total loan amounts for both U.S. Consumer and Small Business Card Member loans have remained relatively consistent over the three months reported.

Negatives

• The net write-off rates for both U.S. Consumer and Small Business Card Member loans are relatively high, indicating potential credit quality concerns.
• The net write-off rate for U.S. Small Business Card Member loans is slightly higher than that of U.S. Consumer Card Member loans.

Risks

• The relatively high net write-off rates could indicate potential credit quality issues within the loan portfolios.
• Fluctuations in delinquency and write-off rates could impact the company's profitability and financial stability.
• The differences in characteristics between the securitized loans in the Lending Trust and the total loan portfolios could lead to varying credit performance.

Industry Context

This announcement provides insight into the credit quality of American Express's loan portfolio, which is a key indicator for financial institutions. The delinquency and write-off rates are closely watched by investors and analysts to assess the health of the company's lending business. These metrics are also relevant to the broader credit card industry and consumer lending market.

Comparison to Industry Standards

• Comparing American Express's write-off rates to competitors like Capital One or Discover would provide a more comprehensive view of its credit performance.
• The reported delinquency rates are within the expected range for the credit card industry, but a detailed comparison to industry averages would be beneficial.
• The performance of the American Express Credit Account Master Trust is similar to other securitized loan trusts, but the differences in loan characteristics make direct comparisons challenging.

Stakeholder Impact

• Shareholders will be interested in these metrics as they reflect the credit quality of the loan portfolio and potential impact on profitability.
• Creditors will monitor these metrics to assess the risk associated with lending to American Express.
• Customers may be indirectly affected by changes in credit policies based on these metrics.

Key Dates

Keywords

delinquency rates, write-off rates, credit performance, consumer loans, small business loans, American Express, lending trust, loan portfolio