Asian Amex card debts minimal

Asian Amex card debts minimal

SINGAPORE (Reuters): American Express Co's (Amex's) exposure to bad debts in its Asian credit card business is minimal, the firm's top regional executive said yesterday.

"Our credit losses in most markets other than two markets are actually better than last year at the present time," Vijay Parekh, Amex Asia-Pacific-Australia president told Reuters.

He said Malaysian and Indonesian bad card debts had worsened "about 15 percent on a year to date basis", but said the figure of potential write-offs for credit and charge cards was small.

"Taking total billings, close to two to 2-1/2 percent level will be a write off for those two countries," Parekh said, adding that he expected losses to be contained at "no more than US$500,000 combined".

Indonesia has been a focal point of an Asian economic crisis that has seen the International Monetary Fund back rescue deals to the region of more than US$100 billion since July 1997.

Amex announced group provisions of US$213 million in its 1998 first quarter results revealed in April, the bulk of which the firm said was for its Asia-Pacific exposures.

American Express Bank had about US$3.7 billion outstanding in loans and other exposure in the Asia-Pacific region on March 31, compared to US$4.3 billion at the end of 1997.

Parekh said the company's card business in Indonesia was small and was satisfied it had adequate underwriting and risk management practices in place to ensure its exposure would remain minimal, despite the company's active drive for new card business in the crisis-hit Asian region.