|
American Express stock has been hit hard this year. It was around $90 in the beginning of the year and is down to $73 by Oct-26-2015. One of the main reason for this debacle is the declining Non-Interest revenues. It was $14.15 billions (6 months ended Jun-30-2014) and was $13.36 billion (6 months ended Jun-30-2015), main reason being the lower Travel commission and fees , which declined from $923 million to $185 million in this period. One silver lining in the company’s business is its Global Network Services business. Following is an excerpt from the company’s 10-K report that highlights this point. Reference - Company's 2014 10-K report , page#5
|
|
GNS focuses on partnering with select third-party banks and other institutions to issue Cards accepted on our global network and/or acquire merchants on our network. Although we customize our network arrangements to the particular country and each partner’s requirements, as well as to our strategic plans in that marketplace, all GNS arrangements are designed to help issuers develop products that are relevant and attractive to their customers and to support the value of American Express Card acceptance to merchants. We choose to partner with institutions that share a core set of attributes compatible with the American Express brand, such as commitment to high quality standards and strong marketing expertise, and we require adherence to our product, brand and service standards.** With over 1,300 different Card products launched on our network so far by our partners, GNS strengthens our brand visibility around the world, drives more transaction volume onto our merchant network and increases the number of merchants choosing to accept the American Express Card. GNS enables us to expand our network’s global presence generally without assuming additional Card Member credit risk or having to invest a large amount of resources, as our GNS partners already have established attractive customer bases to whom they can target American Express-branded Cards, and are responsible for managing the credit risk associated with the Cards they issue. Since 1999, Cards-in-force issued by GNS partners have grown at a compound annual growth rate of 20 percent, totaling over 44 million Cards at the end of 2014. Outside the United States, approximately 80 percent of new Cards issued in 2014 were Cards issued by GNS partners. Spending on GNS Cards has grown at a compound annual rate of 23 percent since 1999, with spending on these Cards at $161 billion in 2014, up 12 percent from a year ago. |
