American Express’s Total Expenses Rose: Here’s Why
Rise in expenses
American Express’s (AXP) total expenses rose 10% between 1H16 and 1H17, from $10.2 billion to $11.3 billion. This rise was mainly due to higher card member service expenses.
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In 1H16, American Express’s card member service expenses were $563 million, and in 1H17, they amounted to $670 million, which reflects a 19% rise.
The company’s salary and employee benefit expenses fell between 1H16 and 1H17, from $2.8 billion to $2.6 billion, which represents an 8% fall. This fall was due to the company’s restructuring changes in 1H16 and adoption of cost-reduction initiatives in 1H17. American Express’s other expenses stood at $2.8 billion in 1H17.
American Express has an enterprise value of $187.2 billion, which is higher than peers’. Other consumer financial players’ (XLF) enterprise value is as follows: