International Finance: American Express Financial Analysis

American Express Financial Analysis
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American Express Financial Analysis
American Express is an American company operating in banking financial services. The company was founded on March 18, 1850. Being a banking financial services company, American Express serves as a model to other companies since it has a wide clientele base. Over the past decade, the company has been making steady profits due to the increased need for people to travel across the world. American Express, also known as Amex, has expanded its services by partnering with other companies such as Wells Fargo for affiliate programs. Through such programs, the company has expanded its market reach, thus becoming one of the most crucial companies in America. The company is crucial because it offers travel and credit card services to all travellers to ensure safety. Risk management by the company is done on international standards since it views and analyses risks in terms of achievements and the number of risks associated with the intended action. According to "American express company – Financials" (n.d.), Amex gained fame during World War I when the British government used it to deliver letters. Through such operations in line with high risk, providers increased aid activity.
Section A: Recent Developments
Development One: Covid19
Another significant development that has impacted the global operations of Amex was the COVID-19 pandemic. The disease outbreak was first announced in December 201, originating in Wuhan, China. The pandemic spread rapidly, and in March 2020, the World Health Organization (WHO) announced it as a pandemic. As the spread and severity of its impacts on human health increased, there were measures developed by the WHO and were implemented by various governments. Among the measure was lockdown and closure of businesses to limit physical interactions to curb and minimize the spread of the virus. As a way of reducing human interactions, various governments introduced total lockdowns. It meant that there would be no physical activity of people outside their homes, while the only ones allowed to work were the essential workers. The latter provided essential services such as food, medication, and emergency services.
During this period, Amex, like other companies, suffered financial losses due to a decrease in purchases and the use of the American Express cards in making purchases and traveling. Due to the lockdown, companies were not making enough profit; hence there were salary cuts and even loss of jobs among other people. Therefore, a sudden financial struggle sent the majority of people thinking about how they would survive. Hence, there was a cutting in costs, and people opted to spend on essential services only, such as purchasing medication and food. Since the majority of the people using Amex cards are involved in travel and international businesses, there was a reduced amount of transactions that cost the company huge losses. In early 2020, the company reported having experienced an income drop of 15%, which was a major blow since there were no signs of the pandemic ending soon. In that year, the company recorded a revenue of $9.4 billion, an 18% drop from ...