American Express Reports Record Quarterly Earnings
American Express reported first quarter financial results today with net income rising 19 percent to $946 million for the quarter on a 10 percent increase in revenues.
Cards in force grew 7 percent to 66.1 million while card payment volume grew 15 percent to $109.3 billion. Amex's Global Network Services payment volume rose over 35% reflecting growth in non-US partner volumes and MBNA-related volumes in the US. Average lending balances grew 4%. Amex grew its marketing, promotion, and rewards expenses aggressively in the quarter -- growing 29 percent.
"We generated record earnings again this quarter, driven by strong growth in our card businesses," said Kenneth I. Chenault, Chairman and Chief Executive Officer."Spending on American Express cards rose among consumers, small businesses and corporate clients. Business volumes from our bank partners were excellent and we signed new partners to our network, including the U.S. wealth management group of UBS. We also continued to expand the global network where American Express cards are welcomed and strengthened long-term relationships with key merchants.
"Spending by our cardmembers grew at double-digit rates and, based on preliminary U.S. volume reports, we continued to outpace our major competitors. Credit quality remained excellent during the quarter.
"We made substantial investments in brand-related marketing programs and have a strong pipeline of new card products and service enhancements for later this year. Our focus is on building customized rewards, service enhancements and marketing programs that will continue to build business with high-spending cardmembers for our merchant partners.
"We are on track with plans to spin off American Express Financial Advisors to our shareholders and recognized some of the initial expenses associated with this transaction during the quarter."
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