American Express outlook revised to negative-S&P
NEW YORK (Reuters) - Standard & Poor's on Wednesday revised its outlook on American Express Co (AXP.N) to negative from stable after the credit card issuer and processing network reported a steeper-than-expected profit decline.
A negative outlook indicates the rating may be more likely to be downgraded over the next two years.
American Express' second-quarter earnings fell to $653 million after it set aside more money to cover credit losses. For details, see [nN21460191]
"The negative outlook reflects the possibility that operating stress may fall outside expected bounds with the worsening of the U.S. economy," S&P said in a statement.
"Further declines in the housing market combined with increases in unemployment could push industry asset-quality deterioration beyond peak levels from past economic cycles," S&P said.
S&P has a counterparty credit rating on American Express of "A-plus," the fifth highest investment grade.
"Although American Express has maintained its focus on high-quality cardmember acquisitions, asset-quality metrics could be hurt by recent portfolio growth because the write-off levels for new customers are typically higher than the total portfolio," S&P added.
(Reporting by Karen Brettell; Editing by Diane Craft)
