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 The US News 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 The US News.
More InformationIn Warsaw last February, President Joe Biden condemned the lawless Russian invasion of Ukraine: "The idea that over 100,000 forces ...
TOKYO, Japan: Fears over intensifying Chinese military activity directed towards Taiwan could escalate into war have prompted Japan, the United ...
TEGUCIGALPA, Honduras: After Honduran President Xiomara Castro severed ties with Taiwan in favor of China to gain more investment and ...
NEW YORK, New York - A Manhattan grand jury has indicted Former U.S. President Donald Trump for his role in ...
MEMPHIS, Tennessee: Tennessee authorities are slowly releasing information about a weekend car crash on a freeway that killed six young ...
JAKARTA, Indonesia: Officials from Indonesia's Aceh province said that more than 180 Rohingya Muslims landed this week by boat, in ...
NEW YORK, New York - U.S. stocks finished the third quarter with a bang on Friday. Despite a volatile start, ...
CUPERTINO, California: In a move aimed at disrupting the fintech sector dominated by Affirm Holdings and Sweden's Klarna, this week ...
BURBANK, California: Walt Disney has begun its planned lay off of 7,000 staff, which was announced earlier this year.A letter ...
NEW YORK CITY, New York: A study published this week reported that China spent $240 billion between 2008 and 2021 ...
NEW YORK, New York - U.S. stocks posted a decent rally on Thursday with all the major indices making good ...
FREMONT, California: Neuralink, Elon Musk's brain implant company, has approached the Barrow Neurological Institute, one of the largest US neurosurgery ...