American Express (AmEx) reported U.S. card service after-tax income declined 23.1% year-on-year (Y/Y) in the fourth quarter (Q4/14) to $665 million, compared to $864 million one-year ago.
The gross dollar volume (GDV) for the U.S. card business rose 8.1% in the fourth quarter to $145.0 billion, compared to $134.1 billion for Q4/13.
U.S. credit card loans, end-of-period (EOP), increased 7.2% to $62.6 billion for the fourth quarter, compared to $58.0 billion in prior quarter, and $58.4 billion in the year ago quarter.
Total U.S. cards of 45.6 million rose 4.3% compared to 43.4 million in the fourth quarter of 2013. Basic cards-in-force increased 4.6% to 34.0 million.
U.S. credit card delinquency (30+ days) was flat 1.0% for Q4/14. Charge-offs for the quarter declined 10 bps to 1.5%.
The AmEx net interest yield declined 10 basis points (bps) at 9.2% for the fourth quarter.
AmEx noted for U.S. Card Services total revenues net of interest expense increased 5% to $4.6 billion from $4.4 billion a year ago. The increase reflected an 8% rise in Card Member spending and higher net interest income.
Provisions for losses totaled $399 million, up 25% from $319 million a year ago. The increase primarily reflected a build in reserves this quarter compared to a reserve release last year.
Total expenses increased 13% to $3.1 billion from $2.8 billion a year ago. The increase reflected a substantial portion of the initiatives related to the Concur gain and were reflected in higher rewards, marketing and operating expenses.
RAM Research projects AmEx profits for the first quarter will com in around $700 million.
For more data on American Express access CardData®. For information and commentary on American Express visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. RAM Research® forecasts on American Express are available exclusively through CardWeb.com.®
Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements (non‐proprietary billed business), and certain insurance fees charged on proprietary cards. In‐store spend activity within retail co‐brand portfolios in Global Network Services, from which the Company earns no revenue, is not included in non‐proprietary billed business. Card billed business is reflected in the United States or outside the United States based on where the issuer is located.
Total cards‐in‐force represents the number of cards that are issued and outstanding. Proprietary basic consumer cards‐ in‐force includes basic cards issued to the primary account owner and does not include additional supplemental cards issued on that account.
Proprietary basic small business and corporate cards‐in‐force include basic and supplemental cards issued to employee Card Members. Non‐proprietary cards‐in‐force includes all cards that are issued and outstanding under network partnership agreements, except for retail co‐brand Card Member accounts that have no out‐of‐store spend activity during the prior 12 month period.