U.S. Express profits increased due to credit card expenditure elasticity

Reuters, January 24-American Express announced a 12%increase in profit in the fourth quarter on Friday because more and more consumers swipe their card travel and online shopping during the holidays.

In the context of a decline in interest rates, the strong holiday season helped the U.S. Express to maintain expenditure.

American Express mainly serves wealthy consumers. Compared with some peers, American Express can better cope with economic uncertainty, because individuals with higher income have lower sensitivity to inflation and increase in loan costs.

In the fourth quarter, the billing business (indicator of the US Express Card expenditure) increased by 8%over the same period last year to $ 408.4 billion.

Within three months as of December 31, the company’s profits increased from US $ 1.93 billion ($ 2.62 per share) in the same period last year to $ 2.17 billion (ie $ 3.04 per share).

CEO Stephen Squeri said: “We ended this year with a strong momentum, and the increase in bills in the fourth quarter accelerated to 8%. The strong growth of expenditure during the period “” “” ”

In this quarter, U.S. Express’s credit loss reserve fell to $ 1.3 billion, compared with $ 1.4 billion in the same period last year.

A vibrant economy and the Fed’s series of interest rate cuts alleviate people’s concerns about the quality of credit. Compared with services with wide services, the wealthy consumers of American Express have also enabled the company to reduce loan losses.

The revenue of American Express, headquartered in New York, increased by 9%to $ 17.18 billion.

Due to the strong expenditure of consumers, the smaller peer, the first capital financial company and the discovery of the financial service company’s earlier quarterly profits this week have exceeded Wall Street’s expectations.

In 2024, the stock price of American Express soared 58.4%, surpassing the increase of competitors Wanshida and VISA, respectively, 23.5%and 21.4%, respectively. (Jaiveer Singh Shekhawat and Arasu Basil Kannagi Bangalore report; edit Maju Samuel)