The company attributed the increase in total revenues to a rise in card member spending and high net interest income and the increase in expenses was attributed to the high customer engagement costs, network volumes and usage of travel-related benefits
American Express reports increase in Card Member spending. (Credit: CardMapr.nl on Unsplash)
American Express has reported a net income of $1.8bn, or $2.40 per share, for the first quarter ended 31 March 2023, a 13% decline compared to $2.1bn, or $2.73 per share, for the same quarter in the previous year.
The company reported total revenues of $14.3bn for the first quarter (Q1) of 2023, a 22% rise compared to $11.7bn for the same period in 2022.
It has reported total expenses of $11.1bn for Q1 2023, a 22% increase compared to $9.1bn for the same quarter the previous year.
The US-based firm attributed the increase in total revenues to a rise in card member spending and net interest income, which indicates higher average loan volumes.
The increase in total expenses was attributed to high customer engagement costs, network volumes and increased usage of travel-related benefits.
American Express chairman and chief executive officer Stephen J Squeri said: “Our first-quarter results reflect strong growth in card member spending and continued high engagement with our premium products.
“Revenue grew 22% from a year earlier to reach a quarterly record, as Card Member spending rose 16% on an FX-adjusted basis.
“Travel and Entertainment spending was particularly robust, growing 39% on an FX-adjusted basis and in March, we saw a record level of reservations booked on our Resy restaurant platform.
“We acquired 3.4 million new cards during the quarter, with US Consumer Platinum and Gold, US Business Platinum, and Delta co-brand account acquisitions all reaching record levels.”
The financial services company’s Consumer Services business reported total revenues of $6.6bn for Q1 2023, a 25% rise compared to $5.3bn for the same period in 2022.
Its Commercial Services unit reported total revenues net of interest expense of $3.5bn for Q1 2023, a 15% increase compared to $3bn for the respective quarter previous year.
The firm’s International Card Services business report total revenues of $2.5bn for Q1 2023, a 22% rise compared to $2.1bn for the same period of 2022.
The company’s Global Merchant and Network Services unit reported total revenues of $1.7bn for Q1 2023, a 23% increase compared to $1.4bn for the respective quarter in 2022.
Squeri added: “Demand from Millennial and Gen Z consumers continues to fuel this growth, accounting for more than 60% of all new consumer account acquisitions in the quarter.
“Millennial and Gen Z customers also continued to be our fastest growing US cohort in terms of spending, growing 28% from a year earlier.
“Our customers have been resilient thus far in the face of slower macroeconomic growth, elevated inflation and higher interest rates, with credit performance remaining best-in-class. That said, we’re mindful of the mixed signals in the external environment.”