AmEx Card Metrics Still Improving (AXP, COF, V, MA)

American Express Company (NYSE: AXP) has released its data on delinquencies and write-off statistics regarding its U.S. Card Services unit.  The data spans the last three months and the improvements are still mostly coming in.  The total loan balances at the end of January was down to $51.8 billion versus $53.7 billion in December and $41.4 billion in November.  The loans past due over 30 days were static at 1.4% for January and December, but November’s 30-days past due was 1.5%.

The news is relatively good for Capital One Financial Corporation (NYSE: COF) after its ING deal has been approved, and ultimately it speaks to fewer future card memberships being lost which process through Visa Inc. (NYSE: V) and Mastercard Incorporated (NYSE: MA).

What is interesting is that the average loans of the month, what is used for interest calculations if not paid in full, was up to $52.8 billion in January from $52.5 billion in December and $51.0 billion in November.  It is probably safe to guess that the average loans will be down in February as less spending in January allows more payoffs.

It is the net write-off rate that continues to improve.  This is calculated based on principal only and it excluding interest and fees.  January’s net write-offs were 2.2%, down from 2.3% in December and down even more from 2.4% in November.

Credit metrics are continuing to improve, even if the improvements are slower than during the middle of the recovery.

JON C. OGG