The trend of higher cardholder spending continued for American Express Co., allowing the New York-based card company’s U.S. Card Services unit to report a 3.9% rise in fourth quarter net income, to $727 million from $700 million a year earlier, the card brand reported Jan. 19.
Net revenue for the unit rose 5.4%, to $3.9 billion from $3.7 billion. Total billed business rose 10.8%, to $114.6 billion from $103.4 billion, while the number of total cards in force rose 2.5%, to 40.9 million from 39.9 million.
Provisions for losses for the U.S. unit totaled $269 million, up from $111 million in the year-ago period, reflecting a larger reserve release in the year-ago period and higher loans outstanding in the current period, partially offset by lower net write-offs in the current period, Amex said in its earnings release.
The International Card Services unit generated net income of $152 million, up 53.5% from $99 million, with revenues rising 8.1%, to $1.33 billion from $1.23 billion. Billed business in the international unit rose 6.1%, to $32.8 billion from $30.9 billion.
Amex’s Global Commercial Services unit produced net income of $180 million, up 74.8% from $103 million, while revenues rose 9%, to $1.2 billion from $1.1 billion. Total billed business for the unit was $39.6 billion, up 10.3% from $35.9 billion.
The Global Network and Merchant Services unit generated net income of $324 million, up 25.1% from $259 million. Total revenues reached $1.3 billion, up 8.3% from $1.2 billion. Total global card billed business was $219 billion, up 10.8% from $197.7 billion.
Cardholders spent a record amount on their American Express cards, and online spending was strong, allowing Amex to capitalize on the growing popularity of online purchasing, Kenneth Chenault, Amex chairman and CEO, said in the earnings release.
“The overall economic recovery in the U.S. remains uneven, and the environment in Europe continues to pose challenges for the global economy. But we start 2012 from a position of strength with a unique network that connects millions of consumers, merchants and businesses around the world,” Chenault added.
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