Travel and entertainment spending by American Express' U.S. commercial customers increased 4 percent year over year to $26 billion in the fourth quarter even as overall spending for business customers had slower growth, the company reported.
Total spending among Amex's U.S. commercial clients totaled $131 billion for the quarter, up 1 percent year over year, as spending on goods and services was flat at $105 billion. Total spending among small and midsized U.S. clients was up 1 percent year over year in the quarter, and spending among large and global U.S. clients was down 2 percent year over year.
In an earnings call, American Express CFO Christophe Le Caillec said spending growth by SMEs—which made up 83 percent of total spending by U.S. commercial clients in the fourth quarter—is "modest" because of "unique dynamics seen by small businesses over the past few years."
"Specifically in 2022, we saw a large increase in organic spending as businesses restocked their inventories following supply chain issues during the pandemic," he said. "This caused a significant grow-over challenge with spending from this segment in the industry in 2023."
T&E spending by Amex's international clients—which includes both consumer and commercial clients—increased 16 percent year over year to $25 billion in the fourth quarter. Commercial client spending—inclusive of both T&E and goods and services spending—increased 13 percent year over year and accounted for more than a third of Amex's total international customer spending.
For the fourth quarter, Amex reported total revenue of $15.8 billion, up 11 percent year over year due to both higher levels of card spending and a higher net interest income, according to Amex. For the full year of 2023, revenue was up 14 percent to $60.5 billion, a record for the company, as it "added 12.2 million new proprietary cards in the year, bringing the total number of cards-in-force issued on our global network to over 140 million," Amex chairman and CEO Stephen Squeri said in a statement.
Amex reported fourth-quarter net income of $1.9 billion, up 23 percent year over year. For the full year, Amex's net income increased 11 percent year over year to $8.4 billion.
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