The corporate card division of American Express saw $129.6 billion in card-billed business during the second quarter, up 6 percent year over year on a foreign currency-adjusted basis, the company reported. Corporate cards in force tallied 14.7 million, a 3 percent increase over the 14.3 million in Q2 2018.
The card giant's Global Commercial Services division reported $3.4 billion in total revenue net of interest expense in the second quarter, up 7 percent from $3.2 billion a year earlier. The increase primarily reflected higher cardholder spending, which ticked up 3 percent year over year to an average of $8,866 per cardholder. Net GCS income surged by 14 percent, to $644 million, despite a rise in total expenses from $2.2 billion in the second quarter of 2018 to $2.4 billion in the second quarter of 2019. The higher expense figure was driven in part by growth in rewards expenses and other customer engagement costs stemming from increased cardholder spending, greater use of card benefits and continued investments in co-brand partnerships, Amex said.
GCS's share of Amex billings held steady at 42 percent for the second straight quarter, maintaining a 1 percent uptick over the final two quarters of 2018. The international small and midsize enterprise segment, comprised of companies with less than $300 million in annual revenue, continued its run of strong growth, with segment billed business up 17 percent year over year adjusted for foreign currency. That follows last quarter's 19 percent year-over-year increase.
During Amex' earnings call, CFO Jeff Campbell cited international SMEs as Amex's "highest-growth" customer type. He also expressed confidence in the "long-term growth opportunity in this segment, given the low penetration we have in the top countries where we operate international small business products, and we continue to believe we have a long runway for higher levels of growth in this segment."
The GCS division's U.S. SME billings for the second quarter jumped 7 percent year over year, while large and global corporate billings rose 5 percent on foreign currency adjusted basis.
Airline-related spending across Amex's entire business line was up 4 percent year over year, adjusted for foreign currency, while U.S. T&E-related billings rose 6 percent, the company reported.
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