American Express sights still high
American Express will retain its ambitious performance targets despite the impact of the regional crisis.
The firm is aiming for 'long-term' revenue growth of 8 per cent a year while the earnings target is 12 to 15 per cent per share.
Chairman and chief executive Harvey Golub admitted the United States financial services group's revenue and profit derived from Asia for the first three quarters of this year were lower compared with the same period last year.
The decline was partly because of the strength of the US dollar which had understated the revenue in dollar terms derived from the region.
Asia's economic downturn also contributed to declines in net interest income and commissions, fees and other revenues.
The group reported a net income of US$574 million for the three months to September, up $524 million from the same period last year.
Mr Golub was visiting Hong Kong as part of his regular Asian tour.
He said he saw more optimism in place in Asia than was the case a year ago, as solutions in force appeared to have started resolving the problems in the countries affected by the crisis.
'People begin to believe things are recovering in South Korea and Thailand, for example,' he said.
Mr Golub believed the new opportunities derived from the development of 'network business' would be the most important driver enabling his group to outperform its peers.
'Network business' refers to commercial banks' issue of American Express brand cards.
The payment transactions on these cards will be processed through American Express' network. American Express and commercial banks will share processing fees collected from merchants.
This business had invited a chain of lawsuits after it was launched two years ago because it was against the by-laws set by the other two key payment network operators Visa and MasterCard to their member banks.
Mr Golub said American Express had tried to put the case to the anti-competition commissions in markets where these by-laws were in force.
Most of these lawsuits have ended and American Express had successfully solicited 39 banks to issue American Express brand cards.
He believed banks participating in American Express card issue programmes should benefit from a potential increase in market share as they had widened payment network operator choices available to card customers.
In Hong Kong, Banque Nationale de Paris private bank will soon launch its American Express card product.