American Express reduces credit limits on cards issued to customers in Lebanon
American Express, the global payment and travel company, reduced the credit limit and cash advances of customers with cards issued in Lebanon.
The move comes as the Arab country faces its most dire economic crisis since the end of its civil war in 1990 and lenders limit capital outflows.
Amex customers either found out their credit limits were reduced once their monthly statements were issued or received a notification by email as their statement was being issued. There was no previous notice from the company, according to some of its clients in Lebanon.
A long-time customer who requested anonymity from
The National, who enquired why Amex’s credit card limit was reduced by about $1,300 (Dh4,771), was told by the company’s regional call centre in Bahrain the decision was neither personal nor reflective of their credit status with the company, but a management decision taken towards cards with resident addresses in Lebanon. The customer service representative did not give further details to the client.
Amex’s head of digital and marketing for the Middle East,
Paul Mampilli, did not address specific questions as to why the company decided to reduce credit limits.
“We understand that our customers in Lebanon may be facing some challenges in [the] market at the moment, however, we are always available to help [and] work out the best resolution for our card members in the current situation,” Mr Mampilli said, without specifying if defaults on cards prompted a reduction in credit limits.
“We regularly review our lending policies [and] we are constantly in touch with our card members to inform and help them manage their finances,” he added.
The measures by Amex follow individual curbs by Lebanese lenders on bank withdrawals and access to foreign currency as Lebanon faces its worst financial crisis since the end of its 15-year civil war and pressure mounts on its local currency peg to the US dollar.
The currency, which is pegged to the US dollar at 1507.5 has lost 19.4 per cent of its value against the greenback in Beirut’s black market.
In a statement on Saturday the head of the Association of Banks in Lebanon, Salim Sfeir, said following a meeting at the presidential palace that depositors’ money is “well-preserved and there is no need to panic”. Lebanon’s central bank governor Riad Salameh is due to hold a press conference today, according to the state-run National News Agency.
Lebanon’s worsening economic climate culminated in more than three weeks of protests across one of the most indebted countries globally. Citizens are demanding reforms and changes in the political system that has governed the country for three decades.
They blame Lebanon’s political elite for widespread corruption and nepotism, which they say contributed to the country accruing $86 billion of public debt, equivalent to 150 per cent of gross domestic product.
The social unrest and protests are the largest the country has experienced since the assassination of former prime minister Rafik Hariri in 2005, which led Syria to withdraw its troops from the country after a 29-year presence there.
The country registered an outflow of capital estimated at about $3bn in the first nine months of the year. Capital inflows to Lebanon, largely in the form of foreign direct investment and non-resident deposits, have slowed sharply in the past 18 months, leading to a significant decline in official reserves and the emergence of a black market, according to the Institute of International Finance.
Both Moody’s Investors Service and Fitch Ratings cut the ratings of Lebanon and its banks further into junk territory, owing to the deteriorating economic climate, which led to the resignation of prime minister Saad Hariri last month.
Earlier this month, Lebanon’s central bank governor instructed all lenders to raise their capital by 20 per cent in two phases by June of next year and, for the first time, ordered them to halt distributing dividends.
Amex is targeting single-digit revenue growth in the Middle East this year, as it boosts its number of merchant partnerships and launches new products and services, Mazin Khoury, chief executive of American Express Middle East, told The National in June.
Corporate spending worldwide is forecast to rise in 2019, according to the preliminary findings of Amex’s 2019 annual Global Business & Spending Outlook for Mena report.