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American Express' Delinquency Rate Flat Y/Y in November

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Last week, American Express Company (AXP - Free Report) released the delinquency and write-off rate statistics for its U.S. Consumer Services (USCS) and U.S. Small Business card member loans, for the month of Nov 2016.

Total USCS card member loans increased 2.6% from the preceding month and 4% from the prior-year period to $46.7 billion in Nov 2016. The 30-day plus delinquency rate remained unchanged at 1.1%, from both the comparable periods. Net write-off rate for the month was 1.5%, down 10 basis points (bps), from the preceding month as well as year over year.

The New York- based company’s total U.S. Small Business card member loans came in at $9.3 billion, inching up 1% on a month-over-month basis and 3.3% year over year. The 30-day plus delinquency rate for Nov 2016 remained unchanged at 1.1%, from both the comparable periods. Net write-off rate for the month was 1.2%, down 30 bps from the preceding month and 40 bps from the year-ago period.

American Express’ total balance under master trust was $24.5 billion for Nov 2016, increasing 1.2% on a month-over-month basis and 1.6% year over year. Annualized default rate (net of recoveries) was 1.1%, flat from the preceding month, while climbing 10 bps from the prior-year period. The 30-day plus delinquency rate was 0.2%, unchanged from both the comparable periods.

Shares of American Express gained 7.8% year to date, outpacing the 5.4% growth recorded in the Zacks categorized Miscellaneous Financial Services industry.



The company remains well poised for growth on the back of its solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments. Notably, the company is well positioned to benefit from the potentially lower tax rates under the Trump administration. Nevertheless, some of the key concerns include high loan loss provisions and intense competition.

American Express carries a Zacks Rank#3 (Hold).

Among others, Alliance Data Systems Corporation reported an increase in average receivables in its Card Services segment for the month of November. The Plano, TX-based company recorded average receivables of $15.21 billion for the month, up 21.9%, year over year. As a percentage of average receivables, net charge-offs for the month was 5.7% compared to 5% in the year-ago period.

Stocks to Consider

LegacyTexas Financial Group Inc. : Over the last 60 days, the Zacks Consensus Estimate for the current year increased 7.7% to $2.09 and advanced 7.4% to $2.33 for 2017. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Synchrony Financial (SYF - Free Report) : The Zacks Consensus Estimate for 2016 moved up 1.5% to $2.68 for 2016 and 1.7% to $3.08 for 2017, over the last 60 days. The company carries a Zacks Rank #2 (Buy).

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