American Express (AmEx) has posted a net income of $1.4bn for the quarter ended 31 March 2016, a decline of 6%, compared to $1.5bn in the prior year quarter.
The credit card issuer said that its total revenues net of interest expense were $8.1bn, an increase of 2% from $8bn a year ago. FX-adjusted consolidated total revenues grew 4%, reflecting a rise in net interest income, card member spending and net card fees.
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U.S. Consumer Services business has recorded a net income of $694m, a rise of 5% compared to $659m a year ago. Total revenues net of interest expense rose 3% to $3.3bn from $3.2bn a year earlier.
International Consumer and Network Services registered a year-over-year decline of 5% in its net income of $188m. Its total revenues net of interest expense stood at $1.3bn, down 1% in comparison to prior year.
AmEx chairman and CEO Kenneth Chenault said: "Despite strong competition throughout the payments industry, we generated a 4 percent increase in FX-adjusted revenues. Those revenues reflected strong, underlying growth in our lending portfolio, along with higher Card Member spending and fee income. Our 6 percent rise in Card Member spending was partially offset by a lower merchant discount rate and the higher costs associated with cash back rewards.
"Investment spending was up significantly and reflected initiatives to grow the business by expanding our Card Member base and gaining a greater share of their overall spending and borrowing. We added 3 million new proprietary cards this quarter, with almost two thirds of the consumer acquisitions coming through digital channels."
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