Capital One Financial Corporation and American Express recorded high profits in the last quarter. This is a clear indication that the financial conditions are beginning to look up and people are now willing to spend more and even pay their credit card dues on time.
In terms of purchases, American Express is the leading credit card issuing company. The profits of this company doubled last quarter. Another financial institution, Capital One too managed to overcome the losses and post a better profit. The amount that was reserved by these companies to compensate for bad loans has now been reduced and they showed an increase in share trading.
Daniel T Henry, the Chief Financial Officer of America Express, said "Spending has rebounded across all business sectors". When speaking to a group of analysts, he also mentioned that the global economy was well on the path to recovery.
The increase in the number of people who are willing to spend using their credit cards clearly indicates that the bad economic times are behind us. This shows that the banking industry is set to heal itself after suffering a number of setbacks over the last two years. For the first time is a span of two years, Bank of America Corporation announced profits from the credit card section. A loss of $303 million was reported by J P Morgan Chase which is lesser than 33% of the loss that was initially forecasted by the bank.
The share price of Capital One stood at $49.32 on the NYSE, which is an increase of 8.3% and American Express went up by 1.6% and stood at $46.77 which is a new 52 week high.
The money inflow through continual operations increased by 73 cents for each share and stood at $885 million. At the same period in the year 2009, it was just 32 cents for each share and stood at $443 million. The figures for 2010 beat the predictions made by the analysts by an average of 63 cents for every share.
Kenneth I Chenault, the chief executive officer of AmEx said that there was an increase of 16% in card member spending and this helped the economy rebound.
The lowest delinquency rate for American Express was seen in the month of March 2010. This rate was the lowest as compared to the other banks in the United States that issued credit cards.