American Express(AXP)2025-01-24 12:04Revenue and Income Growth - Total revenues net of interest expense increased by 9% YoY to $17.179 billion in Q4'24, driven by growth in non-interest revenues and interest income[1] - Net income attributable to common shareholders rose 12% YoY to $2.139 billion in Q4'24, with diluted EPS increasing 16% to $3.04[1] - Total revenues net of interest expense after provisions for credit losses rose by 14% YoY in the U.S. Consumer Services segment, amounting to $7,468 million in Q4'24[14] - Non-interest revenues increased by 11% YoY to $5,314 million in Q4'24, contributing to a total of $20,137 million for FY'24, up 9% from FY'23[16] - Net interest income grew by 12% YoY to $2,938 million in Q4'24, with FY'24 total reaching $11,290 million, a 17% increase from FY'23[16] - Total revenues net of interest expense rose by 12% YoY to $8,252 million in Q4'24, with FY'24 total at $31,427 million, up 12% from FY'23[16] - Non-interest revenues increased by 4% YoY to $3,388 million in Q4'24, with FY'24 total reaching $13,219 million, up 2% from FY'23[17] - Net interest income grew by 35% YoY to $734 million in Q4'24, with FY'24 total at $2,640 million, a 43% increase from FY'23[17] - Total revenues net of interest expense rose by 8% YoY to $4,122 million in Q4'24, with FY'24 total at $15,859 million, up 7% from FY'23[17] - Non-interest revenues for Q4'24 increased by 11% YoY to $2,725 million, with FY'24 reaching $10,369 million, a 9% increase from FY'23[18] - Net interest income for Q4'24 rose by 17% YoY to $265 million, with FY'24 totaling $1,092 million, a 14% increase from FY'23[18] - Annualized Net Income for Q4'24 was $10,129 million, with a Return on Average Equity (ROE) of 34.6%[21] - Net Interest Income for Q4'24 was $4,038 million, with a Net Interest Yield on Average Card Member Loans of 11.8%[23] - U.S. Consumer Services Net Interest Income for Q4'24 was $2,938 million, with a Net Interest Yield of 12.7%[23] - Commercial Services Net Interest Income for Q4'24 was $734 million, with a Net Interest Yield of 11.1%[23] - International Card Services Net Interest Income for Q4'24 was $265 million, with a Net Interest Yield of 8.7%[23] - Adjusted Net Interest Income for FY'24 was $15,543 million, compared to $13,181 million in FY'23[23] Card Member Loans and Spending - Card Member loans grew 11% YoY to $133.995 billion in Q4'24, reflecting strong customer acquisition and spending[2] - Card Member loans increased to $139.674 billion in Q4'24, an 11% year-over-year growth[6] - Total Card Member loans increased by 11% YoY to $139,674 million in Q4'24[10] - Average proprietary basic Card Member spending in Q4'24 was $6,378, up 3% year-over-year[6] - Average proprietary basic Card Member spending for Q4'24 rose by 6% YoY to $6,003, with FY'24 reaching $22,965, a 7% increase from FY'23[18] - Average Card Member Loans for U.S. Consumer Services in Q4'24 were $89,178 million, up from $80,304 million in Q4'23[23] - Average Card Member Loans for Commercial Services in Q4'24 were $30,392 million, up from $25,608 million in Q4'23[23] - Average Card Member Loans for International Card Services in Q4'24 were $17,591 million, up from $15,862 million in Q4'23[23] Credit Quality and Provisions - Total provisions for credit losses decreased 10% YoY to $1.292 billion in Q4'24, reflecting improved credit quality[1] - Net write-off rate (principal, interest, and fees) for Card Member loans remained stable at 2.2% in Q4'24, consistent with Q4'23[10] - Credit loss reserves for Card Member loans grew by 11% YoY to $5,679 million in Q4'24[10] - Total other loans surged by 30% YoY to $9,232 million in Q4'24[12] - Credit loss reserves for other loans increased by 54% YoY to $194 million in Q4'24[12] - Net write-offs for other loans rose by 56% YoY to $53 million in Q4'24[12] - Total other receivables decreased by 2% YoY to $3,587 million in Q4'24[12] - Credit loss reserves for other receivables remained unchanged at $27 million in Q4'24 compared to Q4'23[12] - Net write-offs for other receivables increased by 75% YoY to $28 million in Q4'24[12] - Net write-off rate (principal, interest, and fees) remained stable at 2.6% in Q4'24, with FY'24 average at 2.7%, compared to 2.2% in FY'23[16] - Net write-off rate (principal, interest, and fees) increased to 2.7% in Q4'24, compared to 2.0% in FY'23[17] - Net write-off rate (principal only) for small business improved to 1.6% in Q4'24, down from 2.0% in Q4'23[17] - 30+ days past due as a % of total for small business decreased to 1.3% in Q4'24, down from 1.5% in Q4'23[17] - Net write-off rate (principal and fees) for Q4'24 decreased to 1.3%, with FY'24 reaching 1.4%, a decrease from 2.1% in FY'23[18] Expenses and Costs - Card Member rewards expenses increased 15% YoY to $4.430 billion in Q4'24, driven by higher customer spending[1] - Marketing expenses rose 31% YoY to $1.614 billion in Q4'24, supporting business growth initiatives[1] - Marketing expenses surged by 49% YoY in the U.S. Consumer Services segment, reaching $813 million in Q4'24[14] - Card Member rewards, business development, and Card Member services expenses grew by 15% YoY, reaching $7,345 million in Q4'24[14] - Salaries and employee benefits and other operating expenses decreased by 1% YoY, totaling $4,172 million in Q4'24[14] - Total expenses increased by 11% YoY across all segments, reaching $13,131 million in Q4'24[14] - Marketing expenses surged by 49% YoY to $813 million in Q4'24, contributing to a total of $3,051 million for FY'24, up 18% from FY'23[16] - Total expenses for Q4'24 in Global Merchant and Network Services decreased by 6% YoY to $1,035 million, with FY'24 totaling $3,044 million, an 18% decrease from FY'23[20] Capital and Liquidity - Common Equity Tier 1 capital ratio remained strong at 10.5% in Q4'24, with total capital of $31.1 billion[4] - Return on average common equity improved to 36.1% in Q4'24, up from 33.0% in Q4'23, demonstrating strong profitability[2] - Return on Average Common Equity (ROCE) for Q4'24 was 36.1%, up from 33.0% in Q4'23[21] - Supplementary Leverage Ratio is calculated as Tier 1 capital divided by total leverage exposure, with a minimum requirement from Q4'24 onwards[15] - Interest expense for maintaining corporate liquidity pool and funding Card Member receivables is primarily represented[25] - Interest income from Other loans, interest-bearing deposits, and fixed income investment portfolios is primarily represented[25] Business Growth and Customer Acquisition - Cards-in-force grew to 146.5 million in Q4'24, a 4% increase year-over-year[6] - Proprietary new cards acquired in FY'24 totaled 13.0 million, compared to 12.2 million in FY'23[6] - Proprietary cards-in-force grew by 6% YoY to 46.3 million in Q4'24, with FY'24 total at 46.3 million, up 6% from FY'23[16] - Proprietary cards-in-force for Q4'24 increased by 4% YoY to 21.9 million, with FY'24 reaching 21.9 million, a 4% increase from FY'23[18] - Proprietary new cards acquired measure the effectiveness of the company's customer acquisition strategy[15] Segment Performance - International Card Services reported a 15% FX-adjusted growth in Q4'24[9] - Pretax income in the Commercial Services segment increased by 22% YoY, totaling $814 million in Q4'24[14] - Pretax income in the International Card Services segment declined by 76% YoY, amounting to $34 million in Q4'24[14] - Pretax segment income increased by 5% YoY to $1,545 million in Q4'24, with FY'24 total reaching $6,377 million, a 17% increase from FY'23[16] - Pretax segment income for Q4'24 in Global Merchant and Network Services grew by 4% YoY to $853 million, with FY'24 reaching $4,398 million, a 20% increase from FY'23[20] - Segment assets for Q4'24 in Global Merchant and Network Services decreased by 25% YoY to $17,712 million, with FY'24 reaching $17,712 million, a 25% decrease from FY'23[20] Network Volumes and Billed Business - Network volumes in Q4'24 reached $464 billion, a 7% year-over-year increase[6] - Billed business in Q4'24 was $408.4 billion, up 8% year-over-year[6] - Goods & Services spend accounted for 74% of Q4'24 billed business, growing 7% year-over-year[9] - Travel & Entertainment spend grew 10% year-over-year in Q4'24, accounting for 26% of billed business[9] - Billed business increased by 9% YoY to $174.0 billion in Q4'24, with FY'24 total reaching $654.8 billion, a 7% increase from FY'23[16] - Billed business increased by 4% YoY to $136.0 billion in Q4'24, with FY'24 total at $526.5 billion, up 2% from FY'23[17] - Billed business for Q4'24 grew by 11% YoY to $97.7 billion, with FY'24 reaching $366.9 billion, an 11% increase from FY'23[18] - Total network volumes for Q4'24 increased by 7% YoY to $464.0 billion, with FY'24 reaching $1,764.8 billion, a 5% increase from FY'23[20] Dividends and Shareholder Returns - Cash dividends declared per common share increased 17% YoY to $0.70 in Q4'24, reflecting strong cash generation[1] - Earnings allocated to participating share awards were $17M, $18M, $23M, $18M, and $14M in Q4'24, Q3'24, Q2'24, Q1'24, and Q4'23, respectively[15] - Dividends on preferred shares were $14M, $15M, $15M, $14M, and $15M in Q4'24, Q3'24, Q2'24, Q1'24, and Q4'23, respectively[15] Other Financial Metrics - Total assets increased 4% YoY to $271.461 billion in Q4'24, supported by growth in Card Member loans and cash equivalents[2] - Net interest yield on average Card Member loans including loans held for sale increased to 11.8% in Q4'24, up from 11.7% in Q4'23[10] - Net interest yield on average Card Member loans improved to 12.7% in Q4'24, with FY'24 average at 12.8%, up from 12.4% in FY'23[16] - Net interest yield on average Card Member loans including loans held for sale rose to 11.1% in Q4'24, up from 10.3% in Q4'23[17] - Card Member receivables decreased by 5% YoY to $24,945 million in Q4'24, with FY'24 total at $24,945 million, down 5% from FY'23[17] - Average fee per card in Q4'24 was $108, a 14% increase year-over-year[6] - Average fee per card is computed annually based on proprietary net card fees divided by average proprietary total cards-in-force[15] - Network volumes include billed business (Card Member spending) and processed volumes on cards issued under network partnerships[15] - Cards-in-force represent the number of issued and outstanding cards, excluding supplemental cards on consumer accounts[15]