American Express' corporate card business continued its growth in the fourth quarter of 2018. The Global Commercial Services division, which operates Amex's corporate card programs, had $127 billion in card-billed business, up 9 percent over the final quarter of 2017 on a foreign currency-adjusted basis, according to Amex's latest earnings report. Meanwhile, corporate cards in force reached 14.5 billion, up 4 percent over the previous year.
Revenue net of interest expense for the division was $3.3 billion, a year-over-year gain of 8 percent. The increase owed primarily to higher cardmember spending, Amex said. Average cardmember spend ticked up 5 percent to $8,757.
Amex GCS net income rose 15 percent from $542 million a year ago to $624 million. Net income was limited by a 12 percent increase in GCS's total expenses from $2.1 billion to $2.4 billion. Increased spending on rewards and other customer engagement costs were the primary drivers of the higher expense figure, Amex said.
GCS billings comprised 41 percent of Amex's overall billings, as it did in the third quarter of 2018. The international small and midsize enterprise segment, comprised of companies with less than $300 million in annual revenue, continued its growth spurt, with billings for that segment rising 21 percent year over year, adjusted for foreign currency.
Amex CFO Jeff Campell said the company is confident the SME growth trend will continue. "Given the low market penetration we see in the top countries where we offer international small business products, we continue to feel good about our long-term growth opportunity in this segment," Campbell noted.
The U.S. SME segment's billings rose 10 percent from the last quarter of 2017, while large and global corporate client billings jumped 7 percent.
Amex's airline-related spending across all product types increased 5 percent year over year during the fourth quarter, adjusted for foreign currency, while U.S. T&E-related billings increased 8 percent. Revenue net of interest expense was $10.4 billion, setting a company record for the third straight quarter, following the third quarter's $10.1 billion and the second quarter's $10 billion.
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