Earnings

AmEx Sees Card Member Loans Up 7 Percent

American Express

Payments network American Express reported results Friday (Jan. 24) that showed card spending and loan growth up double-digit percentages, as measured year over year, in the fourth quarter.

In terms of headline numbers, earnings per share were $2.03, two pennies better than the Street.

Total net revenues were up 9 percent year on year to $11.4 billion.

Drilling down into the top line, the Global Consumer Services Group reported 10 percent growth in revenues to $6.2 billion, boosted by card member spending and fees.

Commercial service, where card member spending also grew, saw total net revenues grow by 7 percent to $3.5 billion.

Total net card fees were $1.1 billion, up 20 percent year on year.

Looking through the year, AmEx said it had added 11.5 million proprietary cards through the past year.

In the fourth quarter, billed business, defined as transactions including cash advances, was up 5 percent overall, to $325.2 billion, where the U.S. was $216.8 billion, up 6 percent, and outpacing the remainder (international) growth of 4 percent.

Total cards in force were 114.4 million, up 2 percent in the United States, to 54.7 million. The percentage of charge credit at least 30 days past due was 1.2 percent, unchanged from a year ago.

Basic member spending in the quarter across proprietary cards was, on average, $5,237, up 5 percent from last year. Breaking that down a bit, AmEx cardholders in the U.S. spent $5,630, and year-to-date figures showed $21,515 in card member spending.

Total worldwide card member loans were up 7 percent to $87.4 billion. And within that business line, the net interest yield on the average loan was 11.3 percent, up from 10.7 percent last year. Loans past due at least 30 days were 1.5 percent, up from 1.4 percent a year ago.

On the conference call after the earnings release, American Express CEO Steve Squeri said the results show “our strategy of investing in sheer scale … is working.” As many as 70 percent of new members are choosing fee-based products, he said. New members are “skewing younger and are more digitally engaged.” Management also pointed on the call to increased traction in AP automation products.

Looking toward China, where the company has gotten approval to build out its own payments network, management said there will be opportunity to have more cards on the network as the firm engages with Chinese banks and as Chinese tourists continue to travel to European and other Chinese cities.

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