Robert Besser
01 Feb 2023, 03:54 GMT+10
NEW YORK CITY, New York: As it sets aside more funds to cover potentially bad loans, American Express announced that its fourth-quarter profits fell by 9 percent.
The company also witnessed a rise in charge offs and delinquencies, a troubling sign, as its customer base is usually wealthy and creditworthy.
The New York-based company also announced a plan to raise its quarterly dividend and forecasted higher-than-expected profits for 2023, noting that it earned a profit of $1.57 billion in the quarter, down from $1.72 billion in the same period in 2021, and below analysts' forecasts.
While AmEx cardmembers spent $413.3 billion on their cards last quarter, it has also witnessed a noticeable deterioration in its customers' financial health and set aside $1.03 billion to cover potential credit losses, compared to only $53 million in the same period last year.
The company wrote off 1.3 percent of its total loans, compared to only 0.8 percent one year earlier, and the number of card members who were 30 days or more past due also increased.
In a statement, AmEx CEO Steve Squeri said that the company's credit metrics "remained strong" in the quarter, and it is seeing few signs of a recession in the short-to-medium term, noting that cardmember spending continues to remain strong.
Jeff Campbell, AmEx's chief financial officer, said, "The increase in delinquencies was expected and they do not expect credit losses to get to where they were before the pandemic. Other credit card companies have seen much larger rises in delinquencies, notably Discover Financial, whose stock fell sharply this week after it reported its results," as quoted in the Associated Press.
Get a daily dose of Hawaii Telegraph news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Hawaii Telegraph.
More InformationWASHINGTON D.C.: The US Centers for Disease Control and Prevention (CDC) has reported that infections by the potentially deadly fungus ...
WASHINGTON D.C.: The US Supreme Court will hear a trademark dispute over a dog toy shaped like a Jack Daniel's ...
KABUL, Afghanistan: Afghanistan's education ministry has announced that the country's school year has begun, but the United Nations children's agency, ...
TAIPEI, Taiwan: In an effort to ease tensions between Taiwan and China, former Taiwanese President Ma Ying-jeou will visit Beijing ...
NIAMEY, Niger: Four weeks after US Secretary of State Antony Blinken visited Niger, an American aid worker and a French ...
BRUSSELS, Belgium: While chairing a meeting of EU foreign and defense ministers in Brussels this week, European Union (EU) foreign ...
LONDON, England: During a Bloomberg conference held in London this week, Luke Ellis, CEO of hedge fund Man Group, said ...
NEW YORK, New York - Wall Street jumped on Friday, although gains were modest after bank shares in Europe came ...
LOS ANGELES, California: Some 30,000 education workers in Los Angeles, backed by teachers, went on a three-day strike, canceling school ...
LONDON, England: Despite rising air fares, a potential global economic recession and risks of gridlock at some airports in Europe ...
WASHINGTON D.C.: The US Commerce Department has proposed new laws aimed at preventing China and other countries deemed of concern ...
NEW YORK, New York - As concerns over the banking sector eased, U.S. stocks moved moderately higher on Thursday, but ...