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Shares were down about 1% before the bell, even as the group
managed to eke out a small profit rather than report a loss as
expected by analysts.
The health crisis has hammered economies worldwide and triggered
mass layoffs, which in turn made more people default on their
bills, hurting credit card issuers.
AmEx said its consolidated loss provisions stood at $1.6
billion, up from $861 million a year ago, with the increase
driven primarily by new reserves created to account for the
effects of the pandemic.
JPMorgan Chase & Co <JPM.N> and Citigroup <C.N>, which are among
the largest credit card issuers in the world, have created about
$18 billion in provisions for potential credit losses.
U.S. consumer spending suffered its sharpest ever drop in April
after stay-at-home orders shut down large parts of the economy,
but it rebounded in May and June as businesses started to
reopen.
Spending by customers using AmEx cards during the quarter
dropped 34.2% to $205.1 billion, with overseas markets seeing a
25% fall, while in the United States, it was down 18%.
Net income fell to $257 million, or 29 cents per share, in the
second-quarter ended June 30, from $1.76 billion, or $2.07 per
share, a year earlier.
Analysts on average expected a loss 11 cents per share,
according to IBES estimates from Refinitiv.
Total revenue, excluding interest expense, fell 29.2% to $7.67
billion, a steeper drop than a 24.8% decline forecast by
analysts.
Rivals Visa <V.N> and Mastercard <MA.N> are expected to report
their quarterly results next week.
(Reporting by C Nivedita; Editing by Tomasz Janowski)
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