NOTE 24 Significant Credit Concentrations Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to American Express’ total credit exposure. The Company’s customers operate in diverse industries, economic sectors and geographic regions. The following table details the Company’s maximum credit exposure by category, including the credit exposure associated with derivative financial instruments, as of December 31: (Billions) | | 2016 | | 2015 | On-balance sheet: | | | | | | | Individuals(a) | | $ | 98 | | $ | 104 | Financial institutions(b) | | | 28 | | | 25 | U.S. Government and agencies(c) | | | 3 | | | 4 | All other(d) | | | 18 | | | 17 | Total on-balance sheet(e) | | | 147 | | | 150 | Unused lines-of-credit(f) (g) | | $ | 242 | | $ | 297 |
- Individuals primarily include Card Member loans and receivables, including the HFS portfolios for 2015.
- Financial institutions primarily include debt obligations of banks, broker-dealers, insurance companies and savings and loan associations.
- U.S. Government and agencies represent debt obligations of the U.S. Government and its agencies, states and municipalities and government-sponsored entities.
- All other primarily includes Card Member receivables from other corporate institutions.
- Certain distinctions between categories require management judgment.
- Because charge card products generally have no preset spending limit, the associated credit limit on charge products is not quantifiable. Therefore, the quantified unused line-of-credit amounts only include the approximate credit line available on lending products.
- Primarily relates to established lending product agreements with individuals.
As of December 31, 2016 and 2015, the Company’s most significant concentration of credit risk was with individuals, including Card Member loans and receivables. These amounts are generally advanced on an unsecured basis. However, the Company reviews each potential customer’s credit application and evaluates the applicant’s financial history and ability and willingness to repay. The Company also considers credit performance by customer tenure, industry and geographic location in managing credit exposure. The following table details the Company’s Card Member loans and receivables exposure (including unused lines-of-credit) in the United States and outside the United States as of December 31: (Billions) | | 2016 | | 2015 | On-balance sheet: | | | | | | | U.S.(a) | | $ | 93 | | $ | 99 | Non-U.S. | | | 20 | | | 19 | On-balance sheet(b)(c) | | | 113 | | | 118 | Unused lines-of-credit:(d) | | | | | | | U.S.(a) | | | 203 | | | 259 | Non-U.S. | | | 39 | | | 38 | Total unused lines-of-credit | | $ | 242 | | $ | 297 |
- Includes on-balance sheet Card Member loans and receivables HFS and unused lines-of-credit for Card Member loans HFS, for December 31, 2015.
- Represents Card Member loans to individuals as well as receivables from individuals and corporate institutions as discussed in footnotes (a) and (d) from the previous table.
- The remainder of the Company’s on-balance sheet exposure includes cash, investments, other loans, other receivables and other assets including derivative financial instruments. These balances are primarily within the United States.
- Primarily relates to established lending product agreements with individuals.
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