Despite coronavirus, American Express loan default and write-off rates hold steady in April
Even if American Express (NYSE: AXP) Fully expects to begin to falter under the weight of an economy strained by the effects of the SARS-CoV-2 coronavirus, the latest figures from the company indicate it is not yet weakening. The large payment card company released its latest round of monthly statistics on delinquencies and loan write-offs on Friday, which appear to remain at the same level for now.
As of April 30, the percentage of its consumer cardholder loans that are 30 days past due was 1.7%, matching the figure from the previous month, and only slightly worse than February’s 1.6%. The momentum was similar with small business cardholders, with April posting only a slight increase to 1.6%; the previous two months were 1.4% and 1.3% respectively.
Bad debt write-off rates are also fairly stable. For general public cardholders, they were 2.7%, 2.8% and 2.6% respectively for April, March and February. As for small business cardholders, the figures again stand at 2%, 2% and 1.9% respectively.
One notable change, however, concerned the total outstanding loans. These fell into both categories, especially among consumers. April’s $ 50.5 billion was down 10% month-over-month, and nearly $ 10 billion below February’s level. For small business cardholders, total loans in April were $ 12.4 billion, a steady decline from March 13.4 billion and February 14.0 billion. .
American Express has not commented on these figures. It is telling, however, that like many banks and other major lenders, the company has grown significantly provision for loan losses in its last published quarter. That was the main reason American Express net income fell 76% on an annual basis during this period.
The company’s stock traded down 1.9% on Friday, in contrast to the gains recorded by the broader stock market.
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