American Express shares are down at one-month lows in the after-market following its announcement that the firm will suspend its share buyback program for the first half of 2018 to rebuild capital after the Tax Act.

As previously disclosed, the quarter reflected a substantial charge related to the Tax Act. The $2.6 billion charge represents our current estimate of taxes on deemed repatriations of certain overseas earnings and the remeasurement of u.s. deferred tax assets and liabilities. For 2018, the company expects an effective U.S. tax rate of approximately 22 percent before discrete tax items.

“The upfront charge triggered by the Tax Act reduced our capital ratios and, as a result, while we will be continuing our quarterly dividends at the current level, we plan to suspend our share buyback program for the first half of 2018 in order to rebuild our capital.

“Overall, we believe the Tax Act will be a positive development for both the U.S. economy and American Express. Given the momentum in the business and the anticipated benefit of a lower tax rate, we now expect to invest up to $200 million more in 2018 than we originally planned for customer-facing growth initiatives. We've also made an incremental contribution to our employee profit-sharing plans to support the long-term financial well-being of our employees. And, for shareholders, we expect to use the remaining anticipated benefits to build capital and support earnings growth in 2018.

Amex additionally cut guidance: Sees FY adjusted EPS $6.90 to $7.30, estimate $7.38 (range $6.89 to $7.88) (Bloomberg data)

Which also did not help the stock…

Of course, there is another reason why Amex may need to “build capital”… if a consumer credit bust is around the corner?