American Express 2001 Annual Report Download - page 47

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FINANCIAL REVIEW
American Express Bank reported a net loss of $13 million in 2001, compared with net income of $29 million in 2000. Excluding
restructuring charges of $96 million ($65 million after-tax), 2001 net income would have been $52 million, an 82 percent increase
from 2000. Net revenues rose 10 percent in 2001, reflecting strong performance in Personal Finance Services (PFS) and Private
Banking, partially offset by lower revenue from Corporate Banking activities as the company continues to shift its business focus
away from that sector. In 2000, net revenues declined 5 percent.
Net interest income in 2001 increased from a year ago due to higher consumer loans and the effects of lower funding costs, par-
tially offset by decreases in corporate banking volumes. In 2000, net interest income declined, primarily due to the effects of higher
funding costs. In 2001, commissions and fees decreased due to lower results in corporate banking, and lower mutual fund fees
within the financial institution business, partially offset by higher loan volumes in PFS. In 2000, commissions and fees increased,
reflecting growth in private banking, PFS, and the financial institution business. In 2001, foreign exchange income and other rev-
enue increased due to higher income from a joint venture with AEFA,partially offset by lower corporate banking revenue and other
joint venture income. In 2000, foreign exchange income and other revenues declined from the prior year as a result of lower secu-
rities gains and joint venture income.
Human resources and other operating expenses declined in both years, reflecting reengineering savings and the benefits of lower
employee levels, as AEB continued to rationalize certain country activities. Provision for losses increased substantially in 2001
primarily due to higher PFS loan volumes.
Selected Statistical Information
Years Ended December 31, (Billions, except percentages) 2001 2000 1999
Assets managed*/administered $ 11.4 $ 10.6 $ 8.6
Assets of non-consolidated joint ventures $ 1.9 $ 2.1 $ 2.2
*Includes assets managed by American Express Financial Advisors.
LIQUIDITY AND CAPITAL RESOURCES
Selected Balance Sheet Information
December 31, (Billions, except percentages and where indicated) 2001 2000
Total loans $ 5.3 $ 5.3
Total non-performing loans (millions) $ 123 $ 137
Other non-performing assets (millions) $ 22 $ 24
Reserve for credit losses (millions)* $ 148 $ 153
Loan loss reserve as a % of total loans 2.4% 2.6%
Total assets $ 11.9 $ 11.4
Deposits $ 8.4 $ 8.0
Total liabilities $ 11.1 $ 10.7
Total shareholder’s equity (millions) $ 761 $ 754
Return on average assets** (0.11)% 0.26%
Return on average common equity** (2.0)% 4.4%
Risk-based capital ratios:
Tier I 11.1% 10.1%
Total 12.2% 11.4%
Leverage ratio 5.3% 5.9%
*Allocation of reserves (millions)
Loans $ 128 $ 137
Other assets, primarily derivatives 414
Other liabilities 16 2
Total reserve for credit losses $ 148 $ 153
**Excluding the effect of SFAS No. 115 and SFAS No. 133. The company adopted SFAS No. 133 on January 1, 2001.