American Express first-quarter consolidated total revenues net of interest expense of $15.8bn is ahead by 11% y-o-y. The increase is primarily driven by higher net interest income and increased card member spending.
Consolidated provisions for credit losses of $1.3bn compare with $1.1bn a year ago. The increase reflects higher net write-offs. This is partially offset by a lower net reserve build of $148m, compared with a net reserve build of $320m a year ago.
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Consolidated expenses of $11.4bn are up 3% y-o-y. The increase primarily reflects higher customer engagement costs. These are driven by higher card member spending, increased usage of travel-related benefits and higher marketing investments. This is partially offset by a $196m benefit resulting from enhancements to the models for estimating future membership rewards redemptions.
Millennial, Gen Z consumers account for over 60% of new consumer account acquisitions
“We have started 2024 off strong. Our first-quarter results reflect the positive trends we have seen in our business the last several years,” said Stephen Squeri, Chairman and CEO. “Revenue increased 11% from a year earlier and EPS increased 39%.
“Our continued investments in our value propositions, marketing, brand and technology capabilities have helped drive high levels of engagement with our premium customers. Overall card member spending grew 7% on an FX-adjusted basis. Spending by US consumer card members is up 8% from a year earlier. Spending in our International Card Services segment increases 13% on an FX-adjusted basis.
“We continue to attract high-spending, high credit-quality customers to the franchise. New card acquisitions accelerate sequentially to 3.4 million in the quarter. Our fee-based products account for around 70% of the new account acquisitions we saw in the quarter. We continue to see strong demand from Millennial and Gen Z consumers. They account for over 60% of new consumer account acquisitions globally. Our credit metrics remain best in class.”
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