American Express said in its Q2 earnings release, “Q2 results continued to be significantly affected by the impacts of COVID-19.”
“While our second quarter results reflect the challenges of the current environment, we remain confident that our strategy for navigating this period of uncertainty is the right one,” said Stephen Squeri, Chairman and CEO.
“Our customers continue to be engaged with our products and services; we have a productive and dedicated workforce; our capital and liquidity levels remain strong; and we continue to focus on those areas most critical to our long-term growth. Spending volumes, which declined to their lowest point this quarter in April, gradually improved in May and June, with small businesses being the most resilient. We feel good about our efforts to support our customers as they navigate unexpected financial challenges during these unprecedented times. And, we remain confident in our ability to effectively manage credit risk to achieve the best outcomes for both our customers and our shareholders. In mid-March, we transitioned most of our colleagues to remote working arrangements. Our frontline colleagues have continued to maintain historically strong customer satisfaction levels throughout the period. For customers, we enhanced our value propositions on many of our card products, including adjusting our rewards programs and adding limited time offers and statement credits in categories that are relevant for today, such as wireless, streaming services, business essentials and food delivery. Early results from these enhancements have been encouraging. We haven’t seen an increase in total customer attrition levels from prior years. In addition, we recently launched our largest-ever Shop Small campaign, and have committed more than $200 million over the next three months to help jumpstart spending at small merchants in over a dozen countries globally. As we adjust our business to today’s realities, we are also continuing to invest in areas that are key to our long-term growth. For consumers, we are developing additional product enhancements to meet their changing needs. We extended our digital solutions for our commercial customers with the recent launch of American Express One AP, our first proprietary accounts payable automation offering. For our merchant partners, we raised our contactless transaction thresholds in 60 countries around the world, and we were pleased to become the first foreign payments network to be licensed to clear local currency transactions in mainland China. Finally, our already strong capital and liquidity positions improved in the quarter, and we continued to return capital to our shareholders through dividends. All in all, while we can’t predict the future, I remain confident that the way we are managing the company will enable us to emerge from the current crisis in a position of strength. Looking ahead, we will continue to focus on what we can control – backing our customers, colleagues and communities, while managing our expenses prudently, and making strategic investments to drive our growth over the long term.”
If the $600 a week extra check from the federal government is not extended, I expect credit card companies to get hit hard as millions of people in the U.S. default on their monthly credit card payments.