Each drop like this in the 30+ day delinquencies will continue to help the company. It means lower reserves that have to be set aside for future losses and write-downs.
When you couple this with lower credit each month, that is good because it means that American Express is holding even while the pool is shrinking. The total loans listed in May was $49.5 billion, and the $49.0 billion drop in June was the same in July at $49.0 billion.
What also improved was the annualized default rate net of recoveries. That was 6.1% in May, but fell to 5.9% in June and that came in even lower at 5.4% in July.
Shares had been negative this morning but the stock is up marginally, by $0.03, at $41.76 versus a 52-week trading range of $30.09 to $49.19.
JON C. OGG
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