American Express records $277 million in cumulative restructuring costs for 2023

American Express in focus: American Express incurred a cumulative restructuring cost of $277 million in 2023, as per a recent filing. The expenses were associated with restructuring programs initiated in 2023 or earlier that were still ongoing during the year.

Notably, there were no programmes initiated before 2022 that remained active in 2023.

Regarding restructuring expenses, which primarily included new severance charges net of revisions to existing reserves, American Express recorded $179 million in 2023 and $142 million in 2022.

In 2024, American Express is set to participate in the Federal Reserve's supervisory stress tests to assess its ability to withstand crises. 

Additionally, the company will pay a special assessment fee of $53 million to replenish the Federal Deposit Insurance Corp's fund, which took a hit of roughly $16 billion following the collapse of two regional lenders in the previous year.

The fee, recognised as an expense in the fourth quarter of 2023, is part of the banking regulator's efforts to recover the insured amount for customer money in case of bank failures.

Despite these challenges, American Express remains optimistic about its 2024 prospects, forecasting a better-than-expected profit. 

The company's confidence stems from expectations that its affluent customer base will maintain spending levels, even amidst elevated interest rates. Notably, American Express reported record revenue for the fiscal year 2023.

(With Reuters Inputs)