An office building with American Express logo is seen in Sydney
(Reuters) – American Express’ cumulative cost relating to restructuring programs initiated in 2023 or in prior years that were in progress during 2023 amounted to $277 million, a filing showed on Friday.
There were no programs initiated prior to 2022 that were still in progress during 2023, it said.
Restructuring expense, which primarily relates to new severance charges, net of revisions to existing reserves was $179 million and $142 million for the years ended Dec. 31, 2023 and 2022, respectively.
The credit card giant would participate in the Federal Reserve’s supervisory stress tests in 2024. The test determines a company’s ability to absorb losses during a crisis situation.
The company would also have to pay a special assessment fee of $53 million to refill the Federal Deposit Insurance Corp’s (FDIC) fund that was drained of roughly $16 billion after the collapse of two regional lenders last year.
The banking regulator is charging the industry a fee to recoup the amount which insures customer money when banks fail. American Express recognized this amount as an expense in the fourth quarter of 2023.
Last month, American Express forecast a better-than-expected profit for 2024 on hopes that its affluent customers will be resilient with their spending even amid elevated interest rates.
The New York-based company reported a record revenue for 2023.
(Reporting by Pritam Biswas in Bengaluru; Editing by Shilpi Majumdar)
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