American Express Reports Record Profits and Revenues for Q3 Despite Market Slowdown and Increased Provisions for Delinquency

Earnings driven by strong spending on travel and entertainment and higher fees on premium cards; however, shares fell due to increased credit loss provisions and slow card volume growth.

American Express reported record Q3 revenue of $15.38 billion, a 13% year-over-year increase, and earnings per share (EPS) of $3.30, driven by strong cardmember spending on travel and entertainment.
The credit card provider increased provisions for credit losses to $1.233 billion, up from $1.198 billion in the previous quarter, reflecting higher net write-offs which led to a decline in shares.
Despite increased provisions for credit losses, American Express continues to expect 2023 revenue growth and EPS in line with its beginning of the year guidance.
Card spending growth slowed faster than anticipated, with total network volume rising 7% to $420.2 billion marked the slowest growth in ten quarters, while spending by commercial service customers climbed just 1%.
Despite a slowdown in volume growth, revenue and profit soared to record levels due to continuing new cardholders, willing to pay annual fees for premium products, which accounted for more than 70% of all new accounts in Q3.
The credit card giant's net interest income increased by 34% year-over-year due to higher interest rates, despite warnings on the impact on discretionary spending.