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Despite Coronavirus, American Express Loan Delinquency and Write-Off Rates Hold Steady in April

By Eric Volkman – May 16, 2020 at 6:11PM

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Yet the amount of total loans has been sliding.

Although American Express (AXP 0.03%) fully expects to start buckling under the weight of an economy straining from the effects of the SARS-CoV-2 coronavirus, the company's latest figures indicate it isn't faltering yet. On Friday the big payment card company released its latest set of monthly loan delinquency and write-off statistics, which appear to be staying level for now.

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 with small business cardholders, with April seeing only a slight uptick to 1.6%; the two preceding months were 1.4% and 1.3%, respectively.

Airport lounge with American Express branding.

Image source: American Express.

Write-off rates for bad loans are also fairly still. For consumer cardholders they were a respective 2.7%, 2.8% and 2.6% for April, March, and February. As for small business cardholders the figures came in at, again respectively, 2%, 2%, and 1.9%.

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 total loans stood at $12.4 billion, representing a steady decline from March's $13.4 billion, and the $14.0 billion of February.

American Express did not offer commentary on these figures. It's telling, however, that like many banks and other big lenders, the company significantly increased loan-loss provisioning in its most recently reported quarter. This was the main reason American Express' net income fell by 76% on a year-over-year basis in that period.

The company's stock traded down by 1.9% on Friday, in contrast to the gains enjoyed by the broader stock market.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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