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Citing slowing momentum and rising charge-offs caused by the weakening economy, American Express Co. yesterday reported net income of $21 million for its U.S. Card Services division for the second quarter ended June 30, a 96% decline from net income of $580 million for the same period in 2007. Revenues increased less than 1%, to $3.59 billion from $3.56 billion. The net charge-off rate for managed U.S. card receivables increased to 6.5% from 3.7% for the same period a year earlier, while the company increased its loan-loss reserves for U.S. cards to $1.52 billion from $640 million during the same period in 2007. Kenneth I. Chenault, AmEx chairman and CEO, told analysts during a conference call that, although the U.S. card results were weaker, the company's international and business-to-business sectors looked relatively strong. Income for AmEx's International Card Services division fell nearly 2%, to $115 million from $117 million, while revenues rose 20%, to $1.26 billion from $1.05 billion. Income for the Global Commercial Services division surged 40%, to $227 million from $162 million, while revenues rose 20%, to $1.3 billion from $1.08 billion for the same period a year earlier. AmEx's March acquisition of Corporate Payment Services, General Electric Co.'s commercial card and purchasing unit, boosted the division's results. AmEx's Global Network and Merchant Services division reported income of $299 million, a 12% increase compared with $266 million during last year's second quarter, while revenues for the unit also grew by 12%, to $1.08 billion from $966 million. AmEx managed $76.6 billion in outstanding card loans as of the end of June, up 12% from $68.6 billion a year earlier. U.S. managed card loans were $64.7 billion, up 10% from $58.6 billion. AmEx had 53.5 million cards circulating in the U.S. at the end of June, up 6% from 50.5 million a year earlier. Outside the U.S., AmEx had 36.6 million cards circulating, up nearly 16% from 31.7 million. As a company, AmEx reported net income of $653 million, down 38% from $1.06 billion during the second quarter of 2007. Company's revenues increased 9%, to $7.5 billion from $6.9 billion a year earlier.

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