The company’s consolidated total revenues net of interest expense for the third quarter stood at $11bn, an increase of 8% from $10.1bn during the corresponding quarter of the earlier year
Image: American Express Tower in New York City, US. Photo: courtesy of User:Infratec/Wikipedia.
Global financial services company American Express has reported an increase in net income by 6% to $1.8bn for the third quarter of 2019 from $1.7bn during the corresponding period last fiscal.
Consolidated total revenues net of interest expense for the third quarter stood at $11bn, with an increase of 8%, from $10.1bn the same quarter of earlier year, mainly backed by a rise in card member spending, net interest income and card fees.
The consolidated effective tax rate was 23%, up from 22% a year ago, while the consolidated expenses increased by 9% to $7.8bn from $7.2bn a year ago.
Consolidated revenues net of interest expense increased due to rise in card member spending
American Express chairman and chief executive officer Steve Squeri said: “Our results continued the steady performance we’ve been delivering for several years now, marking the 9th straight quarter of FX-adjusted revenue growth of at least 8 percent.
“I’m pleased with the breadth and consistency of our revenue growth, driven by a well-balanced mix of Card Member spending, loans and membership revenues from our fee-based products, which grew 19 percent and exceeded $1 billion this quarter for the first time.
“The trends we saw in the business this quarter continue to be consistent with an economy that continues to grow, albeit at a more modest pace than last year. FX-adjusted proprietary Card Member spending rose 7 percent, led by strong consumer growth in both the U.S. and International markets.
“Our loan portfolio grew 9 percent, with over 60 percent of that growth again coming from existing Card Members. Credit quality metrics remained at industry-leading levels.”
American Express is anticipating 8% to 10% in revenue growth for the fourth quarter.
For the third quarter of 2019, American Express Global Consumer Services Group posted net income of $857m, an increase by 10% from $779m, while revenues increased by 11% to $6bn, from $5.4bn a year ago.
The Global Commercial Services segment posted a net income of $629m, an increase of 4% from $606m, while revenues increased by 7% to $3.4bn from $3.2bn a year ago.
American Express Global Merchant and Network Services segment reported third-quarter net income of $600m, an increase of 3% from $580m, while total revenues net of interest expense surged by 5% to $1.7bn from $1.6bn a year ago.
In September 2019, American Express said that it is set to launch a new open banking product called ‘Pay with Bank transfer’ for UK consumers to make payments for online purchases using bank transfer.