American Express Co. earned first quarter net income of $1.2 billion, up 35.6% from $885 million during the same period in 2010. Total revenues net of interest expense rose 6.1%, to $7 billion from $6.6 billion, the company announced April 20.
Higher cardholder spending along with greater travel commissions and fees drove the revenue increase, which partially was offset by less interest income caused by a lower loan yield, AmEx said in its earnings release.
Moreover, “continued improvement in credit quality has strengthened our bottom line and provided additional resources to enhance premium products, expand reward offerings and build technology,” Kenneth Chenault, AmEx chairman and CEO, said in the release.
AmEx’s U.S. Card Services unit posted net income of $555 million, up 34.1% from $414 million. Net revenue increased 2.9%, to $3.6 billion from $3.5 billion.
The unit’s provision for loan losses totaled $47 million, down 93.2% from $687 million a year earlier. Cards in force in the U.S. at the end of March totaled 49.4 million, up 1.2% from 48.8 million a year earlier.
The International Card Service unit reported net income of $189 million, up 36% from $139 million. Net revenue increased 9.1%, to $1.2 billion from $1.1 billion.
The international provision for loan losses decreased 96.8%, to $5 million from $158 million.
Continued improvement in credit quality both in the U.S. and internationally caused the provision for loan losses to decrease so significantly, AmEx said.
Total cards in force outside of the U.S. at the end of the quarter totaled 43 million, up 9.7% from 39.2 million a year earlier.
