Summary
This 8-K filing from American Express (AXP) provides an update on credit performance metrics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of October 31, 2020, and for the preceding two months. The report highlights key figures such as total loans, 30-day delinquency rates, and net write-off rates. While offering a snapshot of the company's credit risk exposure during a period of economic uncertainty, investors should note that these figures represent only a portion of the company's overall loan portfolio, as securitized loans in the American Express Credit Account Master Trust have different characteristics.
Key Highlights
- 1Provides delinquency and write-off statistics for U.S. Consumer and U.S. Small Business Card Member lending portfolios for August, September, and October 2020.
- 2U.S. Consumer Card Member loans totaled $49.8 billion as of October 31, 2020, with a 30-day delinquency rate of 1.1% and a net write-off rate of 2.2%.
- 3U.S. Small Business Card Member loans totaled $11.9 billion as of October 31, 2020, with a 30-day delinquency rate of 1.0% and a net write-off rate of 2.1%.
- 4Total Card Member loans for both U.S. Consumer and U.S. Small Business segments combined were $61.6 billion as of October 31, 2020.
- 5The filing also includes credit performance information for the American Express Credit Account Master Trust, which represents securitized loans.
- 6Annualized default rates, net of recoveries, for the securitized trust were 1.6% for October 2020, 1.5% for September 2020, and 1.9% for August 2020.
- 7The company explicitly states that the securitized loan portfolio (Lending Trust) does not have identical characteristics to the total U.S. Consumer or U.S. Small Business portfolios.
Frequently Asked Questions
The primary purpose of this 8-K filing is to provide investors with current information on the credit performance of American Express's U.S. Consumer and U.S. Small Business card member lending portfolios, specifically focusing on delinquency and write-off rates for the months of August, September, and October 2020.
For the U.S. Consumer Card Member loans, the 30-day delinquency rate remained stable at 1.1% for September and October, slightly down from 1.2% in August. The net write-off rate decreased from 2.5% in August to 2.0% in September and rose slightly to 2.2% in October. For U.S. Small Business loans, the 30-day delinquency rate also showed a slight downward trend from 1.2% in August to 1.0% in October. The net write-off rate for Small Business loans decreased from 2.4% in August to 1.8% in September, then increased to 2.1% in October.
No, these figures represent specific segments: U.S. Consumer and U.S. Small Business Card Member lending portfolios. The filing explicitly notes that the American Express Credit Account Master Trust (representing securitized loans) has different characteristics, and its reported credit performance may vary from the total portfolios. Therefore, these statistics provide a partial view of the company's overall credit risk.
The key credit risk indicators disclosed are the total loan balances, the percentage of loans that are 30 days past due, and the net write-off rate (principal only). For the securitized trust, the indicators include the ending principal balance, defaulted amount, and annualized default rate, net of recoveries.