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 loan portfolios for the months ended April 30, March 31, and February 29, 2024.

Summary

• American Express has provided delinquency and write-off data for its U.S. Consumer and U.S. Small Business Card Member loan portfolios.
• For U.S. Consumer Card Member loans, total loans were $82.6 billion as of April 30, 2024, with a 30-day past due rate of 1.4% and a net write-off rate of 2.5%.
• U.S. Small Business Card Member loans totaled $27.7 billion as of April 30, 2024, with a 1.4% 30-day past due rate and a 2.2% net write-off rate.
• The total combined U.S. Consumer and U.S. Small Business Card Member loans were $110.3 billion as of April 30, 2024.
• The report also includes data for the American Express Credit Account Master Trust, showing an annualized default rate of 1.6% for the period of April 1, 2024, through April 30, 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative due to the increase in consumer loan write-offs, but the small business write-offs decreased and the delinquency rates are stable.

Positives

• The 30-day past due rate for U.S. Consumer Card Member loans remained stable at 1.4% in both March and April 2024.
• The 30-day past due rate for U.S. Small Business Card Member loans decreased slightly from 1.5% in March to 1.4% in April 2024.

Negatives

• The net write-off rate for U.S. Consumer Card Member loans increased from 2.3% in March to 2.5% in April 2024.
• The net write-off rate for U.S. Small Business Card Member loans decreased from 2.4% in March to 2.2% in April 2024.

Risks

• The increase in the net write-off rate for U.S. Consumer Card Member loans could indicate a potential rise in credit risk.
• The differences in loan characteristics between the total portfolio and the securitized loans in the Lending Trust may lead to varying credit performance.

Future Outlook

The document does not provide specific forward-looking statements or guidance.

Industry Context

This report provides insight into the credit health of American Express's lending portfolio, which is a key indicator of performance in the financial services industry. It is common for financial institutions to disclose such metrics to provide transparency to investors.

Comparison to Industry Standards

• Comparing American Express's net write-off rates to peers like Capital One or Discover would provide a more comprehensive view of its credit performance.
• The reported default rate of 1.6% for the Lending Trust is within the range of other credit card securitization trusts, but a detailed comparison would require further analysis of the specific loan characteristics.
• The 30-day past due rates are relatively stable, which is a positive sign compared to some other lenders who have seen increases in delinquencies.

Stakeholder Impact

• Shareholders will be interested in the credit performance data as it impacts the company's profitability and risk profile.
• Creditors will monitor the delinquency and write-off rates to assess the creditworthiness of American Express's loan portfolio.
• Customers may be indirectly affected by changes in credit policies based on these performance metrics.

Key Dates

Keywords

delinquency, write-off, credit, loans, American Express, consumer, small business, card member, default rate, securitization