For JPMorgan and Citi, post-financial crisis regulations have made the credit card business more profitable than businesses such as mortgages and capital markets trading. Both the major banks reported upbeat results at their card businesses in their earnings last week. AmEx said it spent $1.93 billion on card member rewards in the second quarter ended June 30, up 9 percent from a year earlier. That increase was the highest since late 2014.
As a result, total expenses soared 21 percent to $5.77 billion, denting profit, which declined but beat analysts' forecasts. Net income attributable to shareholders plunged 33 percent to $1.31 billion, or $1.47 per share, partly reflecting the loss of a longtime partnership with warehouse club retailer Costco Wholesale Corp as well as a $1 billion gain in the year-ago quarter on the sale of a related loan portfolio. Analysts on average had expected a profit of $1.43 per share, according to Thomson Reuters I/B/E/S.