Updates from American Express Co.
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American Express revenues jumped in the second quarter on consumer spending reimbursement, ending a five-quarter decline for credit card issuers.
Revenues rose 33 percent to $ 10.2 billion from $ 7.7 billion the year before, going ahead of analysts ’forecasts by $ 9.6 billion, according to a compiled consensus data from Bloomberg.
The growth highlights the recent recovery in consumer spending, after several months when customers paying off debt and closing accounts have surpassed new records.
“We’ve seen card members’ spending accelerate from the previous quarter and exceed pre-pandemic levels in June, with most of this spending growth coming from Millennial, Gen Z and small business customers, ” said Stephen Squeri, president of Amex and chief executive.
Credit card companies spend a lot to attract new customers in the hope that they will become entrepreneurs once they lower the savings cushions accumulated during the pandemic.
Amex’s marketing spending rose 63 percent in the fourth quarter ahead of the launch of its Platinum card for U.S. consumers, which the company says offers improved life and travel benefits.
Discover Financial Services, which reported gains earlier this week, said a 36 percent increase in marketing contributed to a 26 percent increase in new accounts above 2019 levels in the quarter. most recent. Average loans for credit card have always dropped 7 percent.
Top U.S. lenders, including JPMorgan Chase, Citigroup and Bank of America, have each introduced new credit cards with improved rewards such as repayment offers repaid in recent months in an effort to skip initial growth. But analysts expect the promotions to be held soon.
“I think some of the reward products out there won’t be sustainable in the long run,” warned Roger Hochschild, CEO of Discover.
Overall, Amex reported second-quarter net income of $ 2.3 billion, up from $ 257m a year ago. This was spurred by the release of $ 866 million in reserve reserves for potential bad loans.
Amex shares were up 3.3 percent in pre-market trading.