Chase Grabs New Credit Card Chief from AmEx

The credit card sector saw a major executive shake up yesterday with JPMorgan Chase & Co. (NYSE: JPM) announcing it had enticed a chief of American Express Co. (NYSE: AXP) to head its card group to replace the current chief who is retiring. AmEx quickly followed with promotions of two executives to pick up the duties of the departing leader.

Chase named Gordon Smith as the head of its card group, replacing Richard Srednicki, 59, who is expected to retire in the third quarter. Smith begins immediately and reports to Chase Chairman and CEO Jamie Dimon.
 
Smith had been with AmEx for more than 25 years, most recently as president of its global commercial card group. He had been chief of AmEx’s consumer card services group from 2001 to 2005.

Last year had been mixed for Chase’s card group with profits jumping nearly 70 percent to $3.2 billion while revenues came in flat at $14.7 billion, according to a presentation Srednicki gave to investors in March. Chase attributed the rise in profits to a significant drop in credit costs as bankruptcies and delinquencies declined following the October 2005 changes in federal bankruptcy laws. Srednicki led Chase as it purchased private-label credit card portfolios from retailers Kohls, Toys “R” Us, Pier 1 Imports, and BP.   The Chase portfolio finished 2006 with about 150 million credit cards issued and average receivables rising 3 percent to $141 billion.

In contrast, AmEx reported it had 78 million cards in circulation worldwide and managed card loans of nearly $64 billion at the end of 2006.

AmEx quickly regrouped yesterday, promoting Anre Williams to president of global commercial cards and naming Valerie Soranno Keating executive vice president of global marketing and source-to-settle, involving electronic payments. The changes are effective immediately, according to an AmEx spokesperson. Williams and Soranno Keating will report to Ed Gilligan, group president, American Express International and Global Corporate Services. 

Williams will lead regional teams in sales and client management and continue to run the commercial card business. Soranno Keating will work to expand the electronic payments with clients. Williams had been executive vice president of U.S. commercial cards. Soranno Keating was leading the travelers cheques and prepaid services group.