Summary
This 8-K filing by American Express Company (AXP) on November 16, 2009, provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for the months of August, September, and October 2009. The report emphasizes the company's 'managed basis' presentation, which offers a more comprehensive view of the lending business by including securitized loans. This approach is considered crucial by management for understanding key business dynamics over time. For investors, the key takeaway is the discernible downward trend in net write-off rates across both owned and managed portfolios during this three-month period, suggesting an improvement in credit quality or the effectiveness of risk management strategies amidst a challenging economic backdrop. While 30-day delinquency rates remained relatively stable, the declining write-off rates are a positive signal for the company's credit performance.
Key Highlights
- 1American Express is providing updated credit performance metrics for its U.S. Card Services segment for August, September, and October 2009.
- 2The company continues to emphasize its 'managed basis' presentation, which includes securitized loans to provide a more complete view of its cardmember lending business.
- 3Net write-off rates on a managed basis showed a consistent decrease, falling from 9.0% in August to 7.8% in October.
- 4Net write-off rates on an owned basis also improved, declining from 10.2% in August to 8.6% in October.
- 530-day past due loan percentages remained stable at 4.1% for the managed basis and fluctuated slightly but remained consistent at 4.2% to 4.1% for the owned basis.
- 6The report includes comparative data from the American Express Credit Account Master Trust, showing a declining annualized default rate net of recoveries.
- 7Forward-looking statements highlight the ongoing risks and uncertainties related to credit risk management, economic conditions, and consumer/small business behavior.