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Inside American Express’s Global Commercial Services Division

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Marginal rise

Total 3Q17 revenues for American Express’s (AXP) Global Commercial Services division rose in 3Q17 compared to 3Q16. The revenues were $2.6 billion in 3Q17 compared to $2.4 billion in 3Q16, reflecting a 6.0% rise. The rise was mainly due to favorable net interest income. More cardmember spending also contributed to the rise in revenues.

The division’s net income was $529.0 million in 3Q17 compared to $466.0 million in 3Q16, implying a 14.0% rise.

American Express has total debt of $55.7 billion. Consumer financial companies (XLF) Discover Financial Services (DFS), Capital One Financial (COF), and Fidelity National Information Services (FIS) have total debts of $26.5 billion, $50.8 billion, and $9.7 billion, respectively.

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Provision for losses

The Global Commercial Services division has seen a substantial rise of 45.0% in its provision for losses in 3Q17 compared to 3Q16. In 3Q17, its provision for losses was $194.0 million compared to $134.0 million in 3Q16. A favorable lending write-off rate and loan portfolio increases led to the rise.

The division had $1.6 billion in total expenses for 3Q17, reflecting a 3.0% rise year-over-year. The rise was due to more cardmember spending and more rewards expenses.

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