American Express global card for the first-quarter posted a record yield, nearing 11%, as GDV (gross dollar volume) rose 7% on an FX (currency adjusted) basis but delinquency rose 10 bps (basis points) and charge-offs jumped 30 bps.
American Express (AXP) GCSG (Global Card Services Group) reported an 8.6% YOY (year-on-year) gain with total revenues of US$5554 million for the first-quarter (1Q/19), compared to US$5625 in the prior quarter, and US$5113 million for 1Q/18, according to figures gathered by CardData.
AXP GCSG net income for 1Q/19 declined 60 bps (basis points) YOY to US$821 million, compared to US$702 million for 4Q/18, and US$826 million for the year ago quarter.
AXP noted total GCSG expenses were $4.0 billion, up 12% from $3.5 billion a year ago. The increase was primarily driven by higher customer engagement costs.
The AXP GCSG ratio of net interest income as a percentage of average global outstandings remained level for 1Q/19 at 10.2% sequentially, but up 10 bps from one-year ago. Net interest yield of 10.9% for AXP CGSG rose 20 bps from 4Q/18 and is up 10 bps from 1Q/18.
In 2018, AXP combined USCS (U.S. Consumer Services) and ICNS (International Consumer and Network Services) to form GCSG (Global Consumer Services Group.
Global Card Volume
AXP GCSG GDV (gross dollar volume) increased 4.2% YOY to US$295.7 billion, compared to US$309.0 billion for 4Q/18, and US$283.8 billion for 1Q/18. On a FX (currency adjusted) basis, AXP GCSG GDV increased 7.0% YOY. AXP does not report PDV (purchase dollar volume).
The average spend per cardholder edged up 1.3% YOY from US$4677 for 1Q/18 to US$4741 for 1Q/19. In the fourth quarter AXP GCSG reported a record US$4997 in average card spend. Over te past five years, AXP global card average quarterly spend has remained in the US$4000 to US$5000 range, growing at a CAGR of 4.24%, according to analysis by RAM Research.
Global Card Outstandings
AXP GCSG EOP (end-of-period) global card outstandings jumped 11.3% YOY on an NFX (not currency adjusted) basis to US$81.0 billion, compared to US$81.9 billion for the prior quarter, and US$72.8 billion for 1Q/18.
AXP GCSG average global card outstandings increased 10.9% YOY on an NFX (not currency adjusted) basis to US$80.6 billion, compared to US$79.4 billion for the prior quarter, and US$72.7 billion for 1Q/18.
Global Card Metrics
AXP GCSG 30+ day delinquency ratio increased 10 bps sequentially and YOY. For 1Q/19 AXP GCSG posted a 1.5% delinquency rate, compared to 1.4% for 4Q/18 and 1Q/18.
The gross principal charge-off rate for global card rose sharply in the first-quarter. AXP GCSG posted a 2.7% gross charge-off rate for 1Q/19, compared to 2.4% for 4Q/18, and 2.4 for the first-quarter of last year. The AXP GCSG net principal charge-off ratio also increased significantly from 2.0% for 1Q/18 to 2.0% for 4Q/18, and 2.3% for 1Q/19.
AXP noted provisions for losses totaled $552 million, up 4% from $530 million a year ago. The rise primarily reflected continued growth in the loan portfolio and higher net lending write-offs, partially offset by a smaller reserve build compared to a year ago.
The increase in delinquency, charge-offs and loan loss reserves is in line with other top global issuers and is reflective of what lies ahead for 2019 and 2020 as the global economy enters a slowdown, notes Senior Analyst Robert McKinley of CardData, CardFlash and CardTrak.
Global Cardholder Base
Global CIF (cards-in-force) declined 30 bps YOY to 113.9 million, from 114.0 million in 4Q/18, and 114.2 million for 1Q/18. In the first-quarter there were 54.1 million CIF in the U.S. and 59.8 million CIF internationally.
American Express Global Payment Card Performance Quarterly Report
Quarterly Performance Charts [2015-2025]
• American Express Global Payment Card GDV (US$) • American Express Global Payment Card Average GDV/Cardholder (US$) • American Express Global End-of-Period Outstandings (US$) • American Express Global Average Outstandings (US$) • American Express Global CIF • American Express Global 30+ Day Delinquency • American Express Global Gross Principal Charge-Offs • American Express Global Net Principal Charge-Offs • American Express Global Net Interest Income/Average Outstandings • American Express Global Net Interest Yield