Card-billed business for American Express Global Commercial Services, the division that houses corporate cards, increased 12 percent year over year in the second quarter to $122 billion. Cards in force increased four percent to 14.3 million.
GCS net income increased 18 percent to $564 million. GCS total revenue net of interest expense increased 8 percent to $3.2 billion, reflecting higher cardholder spending, according to Amex.
Total expenses also increased 9 percent to $2.2 billion, which Amex attributed to higher costs related to marketing, business development and growth in rewards expenses.
The GCS segment represented 41 percent of Amex's total billing volume. Billing volume for the company's non-U.S. small and midsize enterprise segment, which represented 5 percent of Amex's total billings, grew 25 percent on a foreign exchange-adjusted basis. The segment has "consistently been one of our strongest growing customer segments … reflecting increasing investments in this particularly attractive component of our global opportunities," Amex CFO Jeff Campbell said during an earnings call.
He said the large and global corporate segment, which represented 11 percent of Amex's total billings, continued to "perform nicely" with a 9 percent year-over-year increase in the second quarter. The U.S. SME segment, which represented 26 percent of Amex's billings, again increased by 10 percent.
Global airline-related spend across all card products increased 7 percent on a foreign adjusted basis, while U.S. T&E billings growth remained "strong" at 8 percent, according to Campbell.
Across Amex's full portfolio, the card network reported net income of $1.6 billion, up 21 percent year over year. Total revenue net of interest expense increased 9 percent to a "record" $10 billion, according to Amex. The card network attributed the growth to higher spending and fees by consumer, small business and corporate cardholders.
"We had a strong second quarter that built on the momentum we started the year with," Amex CEO Steve Squeri said.
The company has continued its progress on the four strategic goals it announced this year, including building on its strong position in commercial payments by signing a multiyear co-branded card partnership with Amazon in the U.S. and opening Centurion lounges in Los Angeles and Denver and a second one at New York's John F. Kennedy International Airport. The goals also include enhancing its digital capabilities. "We're developing AI, machine learning and blockchain capabilities to better serve customers," Squeri said.
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