American Express 2002 Annual Report Download - page 10

Download and view the complete annual report

Please find page 10 of the 2002 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 92

  • 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
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

Business Unit Results
TRAVEL RELATED SERVICES
Travel Related Services (TRS) – which includes our
card, travel, merchant and network businesses, as well
as our Travelers Cheques and Prepaid Services group –
reported record net income of $2.14 billion, up 46
percent from the prior year. While the year-ago results
included TRS’ portion of the previously mentioned
restructuring charge and September 11th-related costs,
underlying earnings growth in 2002 was strong.
TRS’ revenues rose 2 percent, reflecting higher spending
and borrowing on American Express cards. Our rate
of top-line growth at TRS was disappointing due to
persistent weakness in the economy, particularly in
travel and corporate spending. However, we are
encouraged by the momentum we generated in a tough
environment.
Card billed business, or the total amount spent on
American Express cards, rose 4 percent. We had
relatively strong growth in consumer card spending
in the U.S., Canada, Europe and Asia, driven by gains
in the retail and everyday spend categories, as well as
the continued benefits of our cardmember rewards
programs. This was partially offset by continued
weakness in corporate spending, as companies
remained cautious about travel and entertainment
expenditures. Revenues from our global cardmember
lending portfolio increased due to wider interest rate
spreads and solid growth in loan balances.
We added a net total of 2.1 million cards in force in
2002. As noted earlier, this included a significant
increase during the fourth quarter, when we started
to see results from our higher investments in card
acquisition. Total cards in force reached 57.3 million
at the end of the year.
Overall credit quality remained strong and improved
during the year. As a result, our total provision for
losses declined from 2001. Delinquency trends for
both charge and lending receivables improved from
a year ago.
I8AXPI
AMERICAN EXPRESS FINANCIAL ADVISORS ASSETS OWNED, MANAGED OR ADM INISTERED_ Continued
weakness in equity markets led to lower asset levels in 2002. As a result, assets owned, managed or
administered by American Express Financial Advisors declined 9 percent.
02010099
(in billions)
$350
$300
$250
$200
$2 30.6