News Column

AmEx profits rise as Americans won't leave home without it

July 30, 2014

JOSEPH MILLIS



CREDIT card giant American Express yesterday reported a bigger-than-expected nine per cent rise in quarterly profit as more customers used its credit cards in a recovering US economy.


Card member spending rose nine per cent globally, after adjusting for foreign currency, compared to seven per cent growth in the preceding quarter and eight per cent growth in the second quarter last year.


AmEx, which issues plastic cards and owns a card-processing network, said revenue, net of interest expense, rose five per cent to $8.66bn (5.1bn) from $8.25bn a year earlier.


The company also reported a profit of $1.53bn, or $1.43 a share, compared with $1.41bn, or $1.27 a share, a year earlier.


In June, American Express sold half of its corporate-travel business to an investor group that included Certares LP and Qatar''s sovereign wealth fund.


"The strong underlying performance this quarter reflected a continuation of some familiar themes: higher card member spending, credit metrics at or near their historic lows, a modest increase in loan balances," chief executive Kenneth Chenault said in a statement.


US consumer spending picked up in the second quarter after an usually harsh winter dampened sales in the first quarter.


AmEx shares closed at $91.71 on the New York Stock Exchange.


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Source: City A.M. (UK)


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