American Express Co., the biggest credit card issuer by purchases, announced its third quarter profit. It matched analysts’ predictions as card spending growth slowed down. Net income for the company increased 1.2 percent to $1.25 billion from $1.24 billion from the previous year.
Amex faced competition for its affluent spenders. The company tried to improve the value of its global payment network. It announced last week that its Bluebird prepaid debit card would be available in more than 4,000 Wal-Mart Stores. The deal could help the lender capitalize on the new rules for standard debit cards that have affected its rivals, such as JPMorgan Chase and Co.
American Express dropped 0.6 percent to $59 in extended trading in New York. The shares increased 26 percent in 2012. It is slightly above the 25 percent advance for the 81-company Standard & Poor’s 500 Financials index.
Amex placed $479 million to cover future loan losses, which is a 92 percent increase from the same period the previous year. Its total revenue went up 3.8 percent to $7.86 billion, which is below the average estimate of $7.89 billon made by analysts surveyed by Bloomberg.
Expenses dropped 2 percent to $5.5 billion from the previous year as the lending company decreased costs from rewards programs, compensation and marketing. The company will have a four quarter charge connected to a change in how it calculates the redemption rate for credit card rewards. At present, the redemption rate is 93 percent.
Write-offs for loans that the company deemed uncollectible went down in September to 1.9 percent from 2 percent in August. Loans, that were at least 30 days overdue, increased to 1.3 percent from 1.2 percent.
US card income in the third quarter dropped 4.6 percent to $699 million from a year earlier. International card income fell 26 percent to $164 million.