AmEx Quarter Slowed by Loan Loss Provisions

American Express Co. reported today second quarter net income of $1.1 billion up 12 percent from $945 million in the same period a year ago.

Revenues were $7.1 billion, up about 9 percent from $6.5 billion. 

The U.S. Card Services division reported net income of $580 million, down more than 2 percent from $594 million a year ago. Revenues rose

12 percent to $3.6 billion but an 85 percent increase in the provision for loan losses to $640 million offset the gains. In addition, AmEx spent nearly $1.3 billion on marketing, rewards and services, a 16 percent increase from the second quarter of 2006.  

The U.S. charge card unit recorded a 3.6 percent 90-days past due ratio compared with 3.4 percent a year ago. The net loss ratio as a percent of charge volume was 0.30 percent compared with 0.28 percent in 2006. The net write off rate on cardholder spending was 3.7 percent, up from 2.9 percent a year ago. The 30-days past due rate was 2.7 percent up from 2.5 percent.

Worldwide, AmEx increased its provision for losses to $993 million from $730 million, a rise of nearly 28 percent. AmEx’s net write-off rate globally was 4.1 percent, up from 3.8 percent a year ago. The 30-day delinquency rate was 2.8 percent, up from 2.7 percent.

Traders sent AmEx (NYSE: AXP) stock down more than 3 percent in midday trading to $62.60.