Behind American Express’s Global Commercial Services Division
Rise in interest expenses
American Express’s (AXP) global commercial services division generated income of $1.1 billion in 1H16 and $918 million in 1H17, reflecting a 13% fall. This fall has was mainly due to its net interest income falling between 1H16 and 1H17.
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In 1H16, the division saw net interest income of $432 million, and in 1H17, this figure stood at $415 million, reflecting a 4% fall. This fall was mainly due to interest expenses rising between 1H16 and 1H17. The division reported interest expenses of $199 million in 1H16 and $238 million in 1H17, representing a 20% rise.
However, the division incurred marketing, promotion, and other expenses of $1.6 billion in 1H16 and $1.9 billion in 1H17, representing a 17% rise. This rise was mainly due to higher expenses incurred in relation to card member rewards.
American Express has reported TTM (trailing-12-month) operating expenses of $25.9 billion. Other consumer financial companies’ (XLF) TTM expenses are as follows: