American Express Co. (NYSE:AXP), a prominent player in the Consumer Finance industry with a market capitalization of $218.75 billion, has released its latest loan delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios.
According to the filing, American Express reclassified $758 million of Card Member loans related to its Lowe’s small business co-brand portfolio as held for sale as of December 1, 2024. These loans are not included in the December statistics, which only reflect Card Member loans held for investment.
For U.S. Consumer Card Member loans, the total loans stood at $92.6 billion by the end of December, with a 1.4% rate of loans being 30 days past due, consistent across the three months reported. The net write-off rate for principal only was 2.1% for December, slightly up from 2.0% in November and down from 2.4% in October.
This performance aligns with the company's strong operational efficiency, reflected in its healthy 55.7% gross profit margin and impressive revenue growth of 8.94% over the last twelve months.
U.S. Small Business Card Member loans totaled $29.6 billion at the end of December, maintaining a 1.5% rate of 30 days past due loans, similar to the previous two months. The net write-off rate for principal only saw a slight increase to 2.4% in December, compared to 2.3% in November and 2.2% in October.
The combined total for U.S. Consumer and U.S. Small Business Card Member loans reached $122.2 billion.
The filing also notes that the statistics provided are additional to the data reported by the American Express Credit Account Master Trust (Lending Trust) in its monthly Form 10-D report filed with the SEC. The credit performance reported by the Lending Trust may differ from the total loan portfolios due to various factors, including differences in the mix and aging of loans as well as calculation methods.
For the Lending Trust, the ending total principal balance was $26.9 billion for December, with an annualized default rate, net of recoveries, at 1.2%. The total 30+ days delinquent was reported at $0.2 billion.
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In other recent news, American Express has been the subject of various analyst revisions. RBC Capital upgraded its stock target to $330, citing strong revenue durability and growth prospects. Truist Securities initiated coverage with a Buy rating, pointing to the company's dedicated customer base and international operations. However, Compass Point revised its price target down from $325 to $315, maintaining a neutral stance. These revisions come amidst American Express's robust third-quarter earnings, with an EPS of $3.49 and revenues totaling $16.6 billion, an 8% year-over-year increase.
In regulatory developments, the Consumer Financial Protection Bureau (CFPB) took measures against American Express for illegal practices related to credit card rewards programs. The company also disclosed its U.S. Consumer and Small Business Card Member loan delinquency and write-off statistics, providing insight into its credit performance.
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