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Highlights:
- 2024 Net Income Growth: American Express achieved a full-year net income of $10.1 billion, up from $8.4 billion in 2023, with earnings per share increasing to $14.01 from $11.21.
- Revenue Expansion: Total revenues net of interest expense rose to $65.9 billion, a 9% year-over-year increase, driven by higher Card Member spending, revolving loan balances, and card fee growth.
- Dividend Increase: The company plans a 17% rise in its quarterly dividend, increasing from $0.70 to $0.82 per share, starting in Q1 2025.
American Express Company (NYSE:AXP) has reported strong financial results for 2024, with a notable rise in net income and revenue growth, alongside plans for a 17% dividend increase starting in the first quarter of 2025.
Full-Year 2024 Performance
American Express reported total revenues net of interest expense at $65.9 billion, marking a 9% year-over-year growth, or 10% on an FX-adjusted basis. This growth was attributed to increased net interest income from higher revolving loan balances, strong Card Member spending, and robust card fee growth.
The company's provisions for credit losses rose to $5.2 billion, up from $4.9 billion in 2023. This increase reflected higher net write-offs due to growth in total loans and Card Member receivables, although it was partially offset by a smaller reserve build. The net write-off rate for the year stood at 2.0%, compared to 1.8% in 2023.
Expenses for the year grew by 6% to $47.9 billion, primarily due to higher customer engagement costs from increased Card Member spending and travel-related benefit usage, along with greater marketing investments. This was slightly offset by reduced operating expenses following the gain from the sale of Accertify in Q2 2024.
The company’s effective tax rate for the year rose to 21.5% from 20.3% in 2023, primarily due to discrete tax benefits recognized in the prior year.
Fourth Quarter 2024 Results
In Q4 2024, American Express reported net income of $2.2 billion, or $3.04 per share, compared to $1.9 billion, or $2.62 per share, in the same period last year. Revenues net of interest expense rose to $17.2 billion, reflecting a 9% year-over-year growth, fueled by strong Card Member spending and accelerated card fee growth.
Provisions for credit losses in the quarter decreased to $1.3 billion from $1.4 billion in Q4 2023, driven by a lower net reserve build. The net write-off rate declined slightly to 1.9%, compared to 2.0% in the prior year.
Quarterly expenses increased by 11% to $13.1 billion, largely due to higher customer engagement costs and marketing investments, partially offset by reduced operating expenses. The effective tax rate for the quarter decreased to 21.3%, down from 23.0% a year earlier, due to discrete tax charges in the prior year.
Dividend Increase Announcement
American Express plans to raise its regular quarterly dividend by 17%, from $0.70 to $0.82 per share, starting with the Q1 2025 dividend declaration. This reflects the company's confidence in its growth trajectory and its commitment to returning value to shareholders.
