American Express (AXP) calculates its total revenues (net of interest expense) by adding discount revenue, net interest income, net card fees, other fees and commissions, and other revenue. The company’s total revenues (net of interest expense) were $8.8 billion in 4Q17 compared to $8 billion in 4Q16, which mainly reflects a favorable momentum in net interest income.
American Express generated net interest income of $1.7 billion in 4Q17 compared to $1.4 billion in 4Q16, which implies a rise of 23%. The rise came on the back of a favorable momentum in its loans and net interest yield.
American Express saw a rise in its discount revenue from $4.7 billion in 4Q16 to $5.1 billion in 4Q17, implying a rise of 8%. The rise came on the back of a favorable momentum in its billed business.
Between 4Q16 and 4Q17, it saw a rise in net card fees, from $725 million to $785 million, reflecting an 8% rise due to its Delta and Platinum portfolios. There was positive momentum in its key international markets, which also contributed to the rise. Its other fees and commissions were $790 million in 4Q17 compared to $677 million in 4Q16. The company saw a fall in other revenue, from $515 million in 4Q16 to $448 million in 4Q17.
Over the last 12 months, American Express posted a net income margin of 8.1%. Its peers (XLF) Capital One Financial (COF), Synchrony Financial (SYF), and Global Payments (GPN) posted net income margins of 14.1%, 11.8%, and 5%, respectively, on a last 12-month basis.