CREDIT card issuer American Express Co reported an 85% slump in quarterly profit on Friday after it set aside nearly US$628 mil (RM2.67 bil) to prepare for a flood of potential defaults caused by coronavirus-led layoffs.
The company’s net income fell to US$257 mil, or 29 cents per share, in the second quarter ended June 30, from US$1.76 bil, or $2.07 per share, a year earlier.
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 US$1.6 bil, up from US$861 mil a year ago, with the increase driven primarily by new reserves created to account for the effects of the pandemic.
Total revenue, excluding interest expense, fell 29.2% to US$7.67 bil.
Rivals Visa and Mastercard are expected to report their quarterly results next week. – July 24, 2020, Reuters
