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

American Express discloses delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for February, March and April 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 of February, March, and April 2025.
• Effective December 1, 2024, the company reclassified Card Member loans related to its Lowes small business cobrand portfolio to Card Member loans held for sale.
• These loans are excluded from the reported statistics, which only reflect Card Member loans held for investment.
• For U.S. Consumer Card Member loans, total loans were $90.7 billion in April, $90.1 billion in March, and $87.8 billion in February.
• The 30 days past due loans as a percentage of total loans remained constant at 1.4% for all three months.
• The net write-off rate for U.S. Consumer Card Member loans decreased from 2.5% in February to 2.0% in April.
• For U.S. Small Business Card Member loans, total loans were $31.6 billion in April, $31.2 billion in March, and $30.2 billion in February.
• The 30 days past due loans as a percentage of total loans remained constant at 1.6% for all three months.
• The net write-off rate for U.S. Small Business Card Member loans decreased from 2.6% in February to 2.4% in April.
• Total Card Member loans (U.S. Consumer and U.S. Small Business) amounted to $122.3 billion in April, $121.3 billion in March, and $118.0 billion in February.
• The report also includes credit performance data for the American Express Credit Account Master Trust (the Lending Trust).
• The Lending Trust's annualized default rate, net of recoveries, decreased from 1.8% in February to 1.3% in April.
• Total 30+ days delinquent remained constant at $0.2 billion for all three months.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the decrease in write-off and default rates, suggesting improved credit quality. However, the constant delinquency rates prevent a higher score.

Positives

• The net write-off rates for both U.S. Consumer and U.S. Small Business Card Member loans decreased from February to April 2025.
• The Lending Trust's annualized default rate, net of recoveries, decreased from 1.8% in February to 1.3% in April, indicating improved credit performance.

Negatives

• Delinquency rates for both U.S. Consumer and U.S. Small Business Card Member loans remained constant, indicating no improvement in this area.

Risks

• The report mentions that the credit performance of the Lending Trust may vary due to differences in the mix, vintage, and aging of loans.
• The statistics are subject to variability due to factors such as the number of days in a month, timing of holidays and weekends, seasonality, and the timing of information received from third parties.

Future Outlook

There is no specific future outlook provided in this document.

Industry Context

This announcement provides insight into the credit quality of American Express's loan portfolio, which is a key indicator of financial health in the credit card industry. Investors and analysts monitor these metrics to assess the company's risk management and overall performance compared to its peers.

Comparison to Industry Standards

• It's difficult to provide a precise comparison without knowing the exact industry averages for delinquency and write-off rates during the same period.
• However, generally, investors would compare these rates to those of major competitors like Visa, Mastercard (though they primarily process payments), and Discover, as well as other large banks with significant credit card portfolios such as JPMorgan Chase and Citigroup.
• Analysts would also consider macroeconomic factors and trends in consumer spending and debt levels to benchmark American Express's performance.

Stakeholder Impact

• Shareholders: The report provides insights into the credit quality of American Express's loan portfolio, which can influence investor confidence.
• Customers: The delinquency and write-off rates may indirectly affect credit availability and terms for cardholders.
• Creditors: The credit performance data is relevant to creditors assessing the risk associated with American Express's debt.

Key Dates

Keywords

delinquency, write-off, credit card, American Express, loans, consumer, small business