American Express 1998 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 1998 American Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 63

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63

10
due to losses in its Corporate Banking business.
We set aside a $138 million (after-tax) credit loss
provision related to the Bank’s Asia/Pacific busi-
ness, primarily in Indonesia. We also took steps to
ensure that the Bank remains well capitalized.
At year-end, total loans outstanding world-
wide were approximately $5.6 billion, down from
$6.2 billion at the end of 1997. The decline
resulted from a decision to deemphasize corpo-
rate and correspondent banking loans.
As in the United States, we expanded programs
to cross-sell investment and savings products to
Cardmembers. And, within the Private Banking
group, we increased cross-selling of products
manufactured by Financial Advisors, particularly
Premium Deposits Investment Certificates. Private
Banking client holdings increased 22 percent and
Economic conditions had a negative impact on
our international efforts, particularly in Asia.
Nevertheless, we made progress in establishing a
broader foundation for the future.
In January 1999, we announced the formation
of American Express Financial Advisors in Japan,
the world’s second largest economy.
Elsewhere, American Express Bank launched a
family of euro-denominated mutual funds in
France and Germany at the beginning of 1999,
coinciding with the introduction of the euro. The
same funds will be available in Italy and will be
offered in pounds sterling in the United Kingdom
later this year. We also introduced personal mort-
gages in Greece and auto loans in India.
Overall, though, American Express Bank deliv-
ered very disappointing results in 1998, primarily
We are capitalizing on the introduction of
a new pan-European currency, the euro.
American Express was among the first to launch euro-
denominated products, including Travelers Cheques and a
family of mutual funds. Both were introduced in early 1999
to coincide with the introduction of the new currency.Our
correspondent banking center in Frankfurt has established
a dedicated group to process euro-denominated transac-
tions for other banks.