American Express profit rose 12 percent in the fourth quarter, with more customers spending on their cards and much fewer opting to stop paying on their balances.
AmEx also took in higher travel commissions and fees, although rewards spending – normally a big expense – went up 10 percent.
The credit card issuer earned $1.19 billion, or $1.01 per share, in the last three months of 2011, beating Wall Street estimates. Revenue increased 7 percent to $7.74 billion.
Customer spending jumped 11 percent compared to the same quarter 2010, to a record amount.
U.S.-based spending increased 11 percent over the fourth quarter of 2010 to $145.5 billion, an average of $4,091 per cardholder during October, November and December of 2011.
Outside the U.S., spending jumped 10 percent to $73.5 billion, or an average of $3,537 per cardholder.
Overall, revolving credit balances grew, but at a much slower rate than spending as customers “continued to manage their debt and household finances more cautiously,” said Kenneth I. Chenault, American Express chairman and chief executive officer.
Credit quality “remained excellent,” with past-due loans and write-offs at historically low levels, he said.
“Cardmembers spent a record amount on their American Express cards, continuing a trend that has translated into overall share gains during the last two years,” Chenault said. “Billed business rose 11 percent, showing broad-based improvements from the strong levels of a year ago. Online spending was strong as we capitalized on the accelerating popularity of digital commerce.”
