Monday 24 January 2011 8:47 pm

Card spending boom boosts Amex profits

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US CREDIT card lender American Express reported fourth-quarter profits of $1.1bn (£687.8m), up 48 per cent from $716m a year ago. An increase in the use of cards worldwide helped to drive card member spending up by 15 per cent to a record $1.2bn, from $1bn, reflecting higher merchant-related revenues. Fewer overdue payments also helped the company to trim loss reserves, with consolidated provisions for losses totalling $239m, down from $748m in the year-ago period, reflecting continued improvement in credit quality. Consolidated total revenues hit $7.3bn at the fourth quarter, up 13 per cent from $6.5bn a year ago. Amex last week said it would cut around 550 jobs as part of a restructuring process at the company designed to reflect a decline in service volumes, after consumers took to the internet to conduct more routine transactions. Chairman and chief executive officer Kenneth I. Chenault said: “Unemployment levels and housing remain a concern, but other aspects of the economy continue to show signs of improvement. “While we continue to retain the flexibility to scale back our investments as business conditions change, the progress we made during 2010 has put us in a strong competitive position for the next phase of the economic recovery.” American Express, which lends directly to consumers but also competes with Visa and MasterCard to process credit card transactions, has recovered from the financial crisis more fully than many other consumer lenders.