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American Express profits inch up 1 percent

LOS ANGELES -- American Express Co. said Wednesday that its net income rose 1 percent in the third quarter, aided by lower expenses and increased spending by the credit card issuer's customers.

Spending by the company's cardholders rose 8 percent in the U.S. during the July-to-September quarter versus a year earlier. It increased 6 percent globally.

The increased spending helped boost revenue 4 percent. The company also benefited from lower operating costs.

Even so, the rate of growth in spending by the New York company's cardholders actually slowed compared to a few months ago, reflecting a trend among major card issuers this year, CEO Kenneth Chenault said.

The company's provisions for loan losses jumped 92 percent to US$479 million from US$249 million a year earlier, when write-offs and delinquencies were declining at a faster rate and American Express released a far bigger portion of its reserves set aside to cover bad loans.

For its latest quarter, American Express reported net income of US$1.25 billion, or US$1.09 per share, for the three months ended Sept. 30. That compares with net income of US$1.24 billion, or US$1.03 per share, in the same period last year.

Revenue rose 4 percent to US$7.86 billion from US$7.57 billion.

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