NU Online News Service, Oct. 27, 2003, 5:05 p.m. EST – American Express Company, New York, says a 30% increase in net income at its American Express Financial Advisors unit helped it increase its third quarter net income.
The company, which sells credit card services and travel services as well as insurance and investment services, is reporting $770 million in net income on $6.4 billion in revenue for the latest quarter, up from $687 million in net income on $5.9 billion in revenue for the third quarter of 2002.
AEFA is reporting $197 million in net income on $1.5 billion in revenue for the latest quarter, up from $152 million in net income on $1.4 billion in revenue for the comparable quarter in 2002.
AEFA profits were up because the rising stock market helped increase management fees and distribution fees.
Consumers seeking safety have put more assets in AEFA’s fixed-rate investments in recent years. Although the average yield on AEFA’s own invested assets fell to 5.1%, from 5.7%, because of the lingering effects of the plunge in interest rates that took place earlier this year, the increase in the base of assets parked in fixed-rate accounts helped boost AEFA’s investment income, American Express says.