Dive Brief:
- American Express is transitioning "hundreds and hundreds" of its sales employees into roles in debt collection and other credit work, CEO Steve Squeri told investors Thursday during a virtual conference, according to Bloomberg.
- Spending on the payment network’s cards is down about 35% from a year ago. However, that's up from the 45% slump the company saw last month. Spending on travel and entertainment has dropped about 90%, Squeri said. "I never thought I would say down mid-30s is bouncing back," he said.
- About 500,000 AmEx customers are enrolled in short-term forbearance and other relief, accounting for $5 billion in balances, according to Bloomberg. That compares with 845,000 in April. Two-thirds of the 345,000 consumers who have left those programs are now current with their bills, Squeri said.
Dive Insight:
The coronavirus crisis has battered the credit card industry. American Express’s stock price has plunged 21% this year.
"As I try and describe this crisis to people, it's 9/11, the financial crisis added together and multiply that times five," Squeri said. "And then you can throw Hurricane Sandy in."
Squeri said he expects the company to set aside $1.7 billion in loan-loss reserves in the second quarter, matching the previous quarter's figure.
As for the shift of sales staff, Squeri said credit and collections "is a little bit like selling."
"It's not about collecting the money. It's understanding what somebody's issue is and offering them solutions," he said. "It's much more about credit consultation right now than it actually is about collections."
