American Express Provides Update on Its Capital Plans
June 30 2020 - 9:30AM
Business Wire
American Express Company (NYSE: AXP) provided an update today on
its capital plans following further instructions from the Board of
Governors of the Federal Reserve System regarding the 2020
Comprehensive Capital Analysis and Review (CCAR).
For the third quarter of 2020, the company intends to maintain
its current quarterly dividend of 43 cents per common share,
subject to approval by the company’s Board of Directors.
In light of COVID-19 and its impact on the economy, the company
will be resubmitting its capital plan to the Federal Reserve in the
fourth quarter because of changes in financial markets and the
macroeconomic outlook.
The company’s preliminary stress capital buffer (SCB)
requirement, which will take effect on October 1, 2020, is 2.5
percent. Taking into account the preliminary SCB, the minimum
Common Equity Tier 1 (CET1) capital ratio for the company will
effectively be 7.0 percent, subject to confirmation of the SCB for
the company through the CCAR process. The company’s target range
for its CET1 capital ratio remains at 10 to 11 percent. The CET1
ratio target range seeks to support the company’s capital
management objectives of maintaining a strong and flexible capital
profile, while considering expectations from all stakeholders,
including rating agencies. The company’s first quarter CET1 capital
ratio was 11.9 percent, above the target range.
The company’s framework for managing through this challenging
economic environment is built on four principles: supporting its
colleagues and winning as a team; protecting its customers and its
brand; structuring the company for growth in the future; and
remaining financially strong. To support these objectives, the
company suspended share repurchases in mid-March, while maintaining
its common stock dividends during the first half of the year.
Future decisions on capital distributions will depend on various
factors, including: the company’s capital levels and regulatory
capital requirements (including the SCB effective October 1, 2020);
actual and forecasted business results; economic and market
conditions; revisions to, or revocation of, the Federal Reserve’s
authorization of the company’s capital plan; and the CCAR
process.
About American Express
American Express is a globally integrated payments company,
providing customers with access to products, insights and
experiences that enrich lives and build business success. Learn
more at americanexpress.com and connect with us on
facebook.com/americanexpress, instagram.com/americanexpress,
linkedin.com/company/american-express, twitter.com/americanexpress,
and youtube.com/americanexpress.
Key links to products, services and corporate responsibility
information: charge and credit cards, business credit cards, travel
services, gift cards, prepaid cards, merchant services, Accertify,
InAuth, corporate card, business travel, and corporate
responsibility.
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on the Company’s expected business and
financial performance and are subject to risks and uncertainties.
Actual results may differ from those set forth in the
forward-looking statements due to a variety of factors, including
those contained in the Company's Annual Report on Form 10-K for the
year ended December 31, 2019, the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2020 and the Company’s
other filings with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.
The Company undertakes no obligation to update or revise any
forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200630005620/en/
Media Contacts: Marina H. Norville,
Marina.H.Norville@aexp.com, +1.212.640.2832 Andrew R. Johnson,
Andrew.R.Johnson@aexp.com, +1.212.640.8610 Investors/Analysts
Contacts: Vivian Y. Zhou, Vivian.Y.Zhou@aexp.com,
+1.212.640.5574 Melanie L. Michel, Melanie.L.Michel@aexp.com,
+1.212.640.5574
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