American Express 2013 Annual Report Download - page 6

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American Express earned $5.4 billion in net income for 2013, up
20 percent from the previous year. Diluted earnings per share rose
25 percent. Solid growth from our core businesses, disciplined
expense controls and excellent credit quality drove our profits.
The economy didn’t offer many favors. Overall consumer spending and
borrowing remained relatively weak in many parts of the world, with only
modest improvement in GDP as the year progressed. Nevertheless, we
were able to grow revenues by 4 percent, capitalizing on the advantages
of our spend-centric model and diverse customer base. While we came
in below our on-average and over-time goal of 8 percent revenue growth,
we feel good about the result in this environment.
Let’s look more closely at some of the factors that drove our
performance:
HIGHER SPENDING BY CARD MEMBERS: Spending on American
Express cards rose 7 percent for the year as we continued to generate
one of the highest organic growth rates among major card issuers.
Our Card Members swiped, clicked and tapped their way to a record
$952 billion in purchases with us in 2013. We experienced broad-based
growth among consumers, small businesses and corporate clients.
The rise in spending also paved the way for a modest increase in
loan balances. Total loans were up 3 percent, well above the industry
average. The combination of higher loan balances and lower funding
costs drove a 9 percent increase in net interest income.
EXCELLENT CREDIT QUALITY: Credit quality remained excellent.
We continued to outperform our major card-issuing competitors in past-
due and write-off rates. This reflects both the quality of our customer
base and our lending strategy, which is centered on premium products.
While we expect that write-offs will eventually rise from today’s
historically low levels, we are confident in our ability to balance growth
and risk in our portfolio.
HIGHER EARNINGS ON CORE
BUSINESS GROWTH
AMERICAN EXPRESS COMPANY
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