AMEX Card Unit Records
Strong Earnings Growth

The Travel Related Services (TRS) division of American Express had net earnings in the first quarter of 2001 of $522 million, up 16% from the first quarter of 2000. TRS revenues were up 8% due to growth in both charge volume and outstandings.

Interestingly, the average discount revenue derived from fees to merchants who accept the card dropped to 2.68% of each sale from 2.72% one year earlier. Gary Crittenden, Amex Executive Vice President and chief financial officer told Cardline (the online payment card newsletter from Faulkner and Gray) that the decline was "more a question of growth in the everyday spending categories than it is a weakness in travel and entertainment spending." Amex has been actively wooing merchants outside the travel and entertainment categories to accept its cards. Amex reported that it had 53.2 million cards in force worldwide at the end of the first quarter 2001, up 11% from first quarter, 2000. Its U.S. card base counts 34.2 million cards, up 9% from one year earlier.

Net finance charge revenue was the fastest growing component of total revenues, up 25% from a year ago. Net finance charges account for 15% of Amex's TRS unit revenues, up from 13% a year ago and a sign that the company is becoming more oriented toward interest revenues from revolving accounts as opposed to fees from card usage. Amex had $30.2 billion in loans outstanding in the U.S. in the first quarter, up 25% from a year earlier.