American Express reported that its U.S. Card Services division posted third quarter net income of $580 million, up 31% year-over-year, but down 6% sequentially. U.S. gross dollar volume rose 13.5% and the AmEx cardbase expanded 11.4% during the third quarter, compared to the year ago quarter. Marketing, promotion, rewards and cardholder services expenses increased 12% due to higher rewards costs, marketing and promotion activities. However, provisions for losses declined 3% due to lower write-offs which benefited from last year’s bankruptcy legislation and improved collections. Total worldwide card loans rose 16% to $58.5 billion. Delinquency on total card loans (30+ days) increased to 2.7% versus 2.4% one-year ago. Charge-offs on total card loans declined to 3.5% compared to 4.0% for 3Q/05. Card volume in the U.S. hit $101.7 billion, down slightly from the prior quarter. The total number of domestic cards-in-force grew by 1.4 million from the prior quarter to 46.8 million cards. For complete details on American Express’ third quarter results, visit CardData ([www.carddata.com]).
American Express U.S. Card Portfolio Snapshot
3Q/06 2Q/06 1Q/06 4Q/05 3Q/05 Ann Chng
Volume $101.7b 102.5 92.9 93.0 89.6 +13.5%
Cards 46.8mm 45.4 44.0 43.0 42.0 +11.4%
Source: CardData (www.carddata.com)