Loan Delinquency And Write-Off Rates Of American Express Hold Steady In April Despite Coronavirus Outbreak
Coronavirus is severely affecting everything around us. Everyone was expecting that the trembling economy would hamper the growth of American Express. This virus has already affected many businesses and people are also spending less on their credit card transactions. However, things did work very well for this giant company. At least, last month report of this big payment card company is revealing that American Express is not yet faltering. On Friday, the company released its latest report which was about the company’s latest set of monthly loan delinquency and write-off statistics.
According to Eric Volkman, stocks and finance expert. “As of April 30, the percentage of its consumer cardholder loans 30 days past due was 1.7%, matching the previous month’s figure, and only slightly worse than February’s 1.6%. The dynamic was similar to small business cardholders, with April seeing only a slight uptick to 1.6%; the two preceding months were 1.4% and 1.3%, respectively”.
If we talk about the write-off rates for bad loans, they are fairly still. For consumer cardholders, these rates were 2.6%, 2.8% and 2.7% for February, March and April. As for small business cardholders, the figures came in at, again respectively 1.9%, 2% and 2%.
Volkman mentioned in his article, “One noticeable change, however, was in the total loans outstanding. These fell in both categories, particularly with consumers. April’s $50.5 billion was 10% down on a month-over-month basis, and nearly $10 billion under the February level. For small business cardholders, April’s total loans stood at $12.4 billion, representing a steady decline from March’s $13.4 billion, and the $14.0 billion of February”.
Well, American Express did not make any commentary on these figures. It is clearly indicating that like many banks and other big lenders, the company significantly increased loan-loss provisioning in its most recently reported quarter. Due to this, the net income of American Express fell by 76% on a year-over-year basis in that period.
On Friday, the stock of American Express traded down by 1.9%, in contrast to the gains enjoyed by the broader stock market.
Speciality Of American Express
American Express which is otherwise known as Amex is an American multinational financial services corporation headquartered at 200 Vesey Street in New York City. The company offers world-class Charge and Credit Cards, Rewards, Gift Cards, Personal Savings, Travel, Insurance, Business Service and many more.