Card-billed business for American Express Global Commercial
Services, the division that houses corporate cards, increased a modest 1
percent year over year in the third quarter to $100.1 billion. GCS net
income—which includes small-business services, merchant financing products and
foreign exchange services—remained stagnant at $466 million compared with the
same quarter in 2015. GCS net income decreased 1 percent year over year for the
three quarters ending Sept. 30. Cards in force totaled 13.6 billion, a 9
percent year-over-year decline for the quarter.
The rise, although smaller than the 4 percent experienced in
the second quarter of 2016, prompted Amex CFO Jeff Campbell to call GCS
billings "healthy" during an earnings call, an improved tone from the
previous quarters' "tough"
and "disappointed"
outlooks. "Within the GCS segment, performance amongst both U.S. and
international middle-market and small businesses remains healthy,"
Campbell told investors.
Still, he highlighted the challenges. "Consistent with
prior quarters, spending by large corporates remains weak," he said adding
that the year-over-year billings decline reflects the slow-growth revenue
environments and the cost-reduction efforts at many large companies."
Across the full Amex portfolio, third-quarter
net income decreased 10 percent to $1.1 billion, attributed to new card member-acquisition
initiatives, including higher marketing and promotion expenses. Amex sold its
co-branded relationship with Costco to Citi in June, so the third quarter marks
the first without that income for Amex.