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American Express Q2 net income surges

Credit card company reports spending nearing pre-recession levels.

American Express has reported a net income of $1bn or $0.84 per diluted share, for the second quarter ended June 30, 2010, compared to $337m or $0.09 per diluted share, a year ago.

Consolidated total revenues net of interest expense for the second quarter of 2010 were $6.9bn, up 13% from $6.1bn a year ago.

For the first half of 2010, the company posted a net income of $1.9bn, or $1.57 per diluted share, compared to $774m, or $0.40 per diluted share, for the same half of 2009. Consolidated total revenues net of interest expense for the first six months of 2010 were $13.46bn, compared to $12.02bn in the same period of 2009.

Kenneth Chenault, chairman and CEO of American Express, said: "Cardmember spending rose 16% and improved credit indicators continued the year-long trend that began last spring.

"While the economic environment remains uneven, our net income and billed business are back at, or near, their pre-recession levels. Some of the year-over-year improvement represents an initial return on our investments in the business, but the large percentage increases also reflect comparisons with last year's recessionary levels.

"We remain cautious about the economy and the challenging regulatory environment. We also recognize that the grow-over comparisons will be more difficult in the second half. Nonetheless, there are significant opportunities to build on the momentum of the last year. We plan to maintain our investments in the business at substantial levels, and dedicate resources to select partnerships and acquisitions."