8-K: American Express Releases Delinquency and Write-Off Statistics for U.S. Consumer and Small Business Card Member Loans

American Express discloses delinquency and write-off rates for its U.S. Consumer and Small Business Card Member lending portfolios for January, February, and March 2025.

Summary

• American Express has released delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios.
• The data covers the months ended January 31, February 28, and March 31, 2025, as well as the three-month period ended March 31, 2025.
• Effective December 1, 2024, Card Member loans related to the Lowes small business co-brand portfolio were reclassified as held for sale and are excluded from the reported statistics.
• As of March 31, 2025, U.S. Consumer Card Member loans totaled $90.1 billion, with a 30-day past due rate of 1.4% and a net write-off rate of 2.4%.
• U.S. Small Business Card Member loans totaled $31.2 billion, with a 30-day past due rate of 1.6% and a net write-off rate of 2.6%.
• The total Card Member loans for both U.S. Consumer and U.S. Small Business segments amounted to $121.3 billion as of March 31, 2025.
• The report also includes credit performance data for the American Express Credit Account Master Trust (the Lending Trust) for the three months ending March 31, 2025, with an ending total principal balance of $25.3 billion as of March 31, 2025.
• The Lending Trust's annualized default rate, net of recoveries, ranged from 1.5% to 1.8% during the period.

Sentiment

Score: 6

Explanation: The sentiment is neutral as the document primarily presents statistical data without expressing explicit positive or negative views. The delinquency and write-off rates are slightly elevated, but not alarming.

Risks

• The report mentions that the credit performance of the Lending Trust may vary due to differences in loan mix, vintage, aging, and calculation methods.
• Statistics are subject to variability due to factors like the number of days in a month, holidays, seasonality, and timing of information from third parties.

Industry Context

This announcement provides insights into the credit quality of American Express's card portfolio, which is a key indicator of the company's financial health and performance in the consumer and small business lending sectors. Monitoring delinquency and write-off rates is crucial for assessing the overall economic environment and consumer behavior.

Comparison to Industry Standards

• Comparing American Express's delinquency and write-off rates to those of competitors like Visa, Mastercard, and Discover would provide a more comprehensive understanding of its credit portfolio performance.
• Analyzing these metrics against industry averages for credit card issuers and small business lenders can reveal whether American Express is performing better or worse than its peers.
• For example, if the average net write-off rate for U.S. credit card issuers is 2.0%, American Express's consumer rate of 2.4% might raise concerns, while its small business rate of 2.6% would be even more noteworthy.
• Benchmarking against similar portfolios, such as JPMorgan Chase's credit card division or Bank of America's consumer lending segment, can offer valuable context.

Stakeholder Impact

• Shareholders will use this information to assess the credit risk and overall financial health of American Express.
• Creditors will monitor these metrics to evaluate the company's ability to repay its debts.
• Employees may be affected by any changes in lending policies or risk management strategies resulting from these trends.

Key Dates

Keywords

delinquency rate, write-off rate, credit performance, card member loans, american express, lending trust