American Express (AmEx) fourth quarter (4Q/15) profits rose year-on-year (YOY) by 20.0% to $799 million.
U.S. credit card outstandings declined 18.0% YOY to $51.4 billion, compared to $62.1 billion in the prior quarter and $62.6 billion in year ago quarter.
U.S. credit card Purchase Dollar Volume (PDV) rose 5.0% YOY to $152.3 billion, compared to $143.4 billion in the prior quarter and $145.0 billion in year ago quarter.
Early stage delinquency (30+ days) for U.S. cards was stable at 1.0% for the fourth quarter, compared to 1.0% in the third quarter and 1.0% for the year ago quarter.
Charge-offs for U.S. cards inched upward to 1.6% for the fourth quarter, compared to 1.5% in the third quarter and 1.5% for the year ago quarter.
Yield dipped slightly at 9.3% for the fourth quarter, compared to 9.4% for 3Q/15 and 9.1% for 4Q/14.
AXP US Card P/L
4Q/14: $665 million
1Q/15: $934 million
2Q/15: $886 million
3Q/15: $794 million
4Q/15: $799 million
Source: American Express
AmEx reports total revenues net of interest expense for U.S. Card Services increased 5% to $4.8 billion, from $4.6 billion a year ago. The rise reflected higher net interest income from growth in the loan portfolio, as well as an increase in net card fees and Card Member spending.
Provisions for losses totaled $440 million, up 10% from $399 million a year ago. The increase primarily reflected a larger build in reserves this quarter, compared to a year ago. The current quarter’s provisions benefited from the reclassification of certain co-brand loan portfolios to “held for sale,” as credit costs associated with those portfolios are now reported in other operating expenses, beginning in December 2015.
Total expenses were flat at $3.1 billion compared to a year ago. The current quarter reflected higher Card Member services costs and investment spending that was maintained at an elevated level. The year-ago quarter included a portion of the three significant expense items mentioned earlier.
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