American Express files for permission to repay TARP

(Reuters) - American Express Co (AXP.N) asked on Thursday for permission to repay the $3.4 billion in TARP funds it received, after the U.S. government stress test showed the credit card firm is well capitalized.

According to bank regulators' guidance, American Express has to show it can issue long-term debt in the public markets that is not backed by government guarantees in order to repay the TARP funds, the fourth-largest U.S. credit card company said.

American Express became a bank last November as bond markets closed down and lenders outside the banking system began looking to fund themselves with deposits. Being a bank also helped American Express win access to capital from the government's Troubled Asset Relief Program.

"Since then, financial markets have become more stable, and American Express has made substantial progress in adapting to a very difficult economic environment," the company said in a statement.

The stress test estimated American Express had enough resources to remain profitable, even in a worst case scenario of 20 percent of credit card losses over 2009 and 2010.

Chief Financial Officer Daniel Henry told analysts on a conference call that American Express did not plan to raise common equity.

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