Fitch Ratings upgraded American Express Company's (AXP) Long-Term Issuer Default Rating to A+ from A and assigned a Stable Outlook. It also raised the Viability Ratings of the parent company and its primary banking subsidiary, American Express National Bank, to a+ from a.
The upgrade reflects the strength of AXP's unique closed-loop payments network, its spend- and fee-centric business model, and its focus on an affluent customer base. Approximately 75% of the company's revenue comes from fees, making it less sensitive to interest rate fluctuations than its peers.
AXP's return on equity exceeds 30%. Strong capital generation and industry-leading asset quality also supported the upgrade.