American Express 2011 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2011 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 113

  • 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
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

Keeping our customers satisfied was the key. We earned their loyalty by providing
greater value through industry-leading benefits, rewards and service. We gave
them more ways to make purchases online and oine, through an expanding
merchant network and new payment alternatives. And, as more spending
shifted online, we were right there with our cardmembers, corporate clients and
merchant partners, making e-commerce easy, secure andrewarding.
These factors also help explain why we did so well attracting more high-spending,
creditworthy prospects into our franchise. We added 6.4million cards-in-force
during the year, which brought our total to 97.4million. First-year spending
levels for these new customers were the highest we’ve seen since the recession.
As worldwide billings among both tenured
and new cardmembers grew, credit quality
improved. By year-end, write-o and 30-day
past-due rates were at historic lows. Write-
os in our worldwide lending portfolio fell to
2.3percent for the fourth quarter compared
with 4.3 percent a year ago. Our credit
performance far outpaced theindustry.
Better credit quality enabled us to reduce the amount of money we set aside
in provisions for losses by 50 percent, which freed up funds for business-
building investments.
+ INVESTMENTS AND EFFICIENCY
We aim to be both flexible and opportunistic when it comes to investment
spending. Coming out of the recession, we saw a competitive opening and
increased our investments. We focused on marketing and promotion,
cardmember rewards and services, strategic acquisitions and other new business
opportunities–all of which were designed to aid growth in the comingyears.
Our performance, combined with settlement payments received from Visa and
MasterCard, gave us more dollars to spend, so we put those funds to good use.
This contributed to higher operatingexpenses.
In the second half of 2011, as the Visa and MasterCard settlement payments were
phasing out and releases from loss reserves were diminishing, we deliberately
To Our Shareholders
Investments and
Eciency
Our Transformation
The Digital
Convergence
A Challenging
Environment
Thank You
R
RECORD NET INCOME
Net income rose 22% from
2010 to a record $4.9 billion.
AMERICAN EXPRESS COMPANY
3