* Q2 net income $1.43/shr vs $1.27 year earlier
* Card member spending up 9 pct to $258 bln
* Worldwide card member loan balance up 5 pct
(Adds comments from conference call, analyst comment, details)
By Avik Das
July 29 American Express Co reported a 9
percent rise in second-quarter profit as more customers used its
credit cards in a recovering U.S. economy.
Card member spending rose 9 percent globally to $258
billion, after adjusting for foreign currency, compared to 7
percent growth in the preceding quarter and 8 percent growth in
the second quarter last year.
Growth in billed business volumes was encouraging, Keefe
Bruyette & Woods analyst Sanjay Sakhrani said. "We are starting
to see some traction in the United States as well as in Europe."
American Express Chief Financial Officer Jeffrey Campbell
said on a conference call that spending levels of its customers
indicated higher confidence about the economy.
The rise in consumer confidence also helped smaller rivals
Capital One Financial Corp and Discover Financial
Services post better-than-expected results.
American Express, which mostly issues its own cards unlike
Visa Inc and Mastercard Inc that work through
banks, benefits from its largely affluent customers' consistent
spending and low rates of default.
However, single-digit growth in spending by the company's
card users for nine straight quarters has pushed American
Express to launch new products such as a fee-free card that
targets a wider range of customers.
AmEx's net income rose to $1.53 billion, or $1.43 per share,
for the second quarter ended June 30, from $1.41 billion, or
$1.27 per share, a year earlier.
Total revenue, net of interest expense, rose 5 percent to
"The strong underlying performance this quarter reflected a
continuation of some familiar themes: higher card member
spending, credit metrics at or near their historic lows, a
modest increase in loan balances," Chief Executive Kenneth
Chenault said in a statement.
Net income for the second quarter included a gain of $626
million from the spinoff of AmEx's business travel operations.
Excluding the gain, the company's earnings were $1.38, which
were in line average analyst estimate, according to Thomson
Total expenses rose 2 percent to $5.86 billion, partly due
to a rise in marketing costs.
AmEx's worldwide card member loan balances rose 5 percent to
$66.3 billion from a year earlier.
AmEx shares closed at $91.71 on Tuesday on the New York
Stock Exchange. They have gained about 6 percent in the past six
(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)