2017.07.1921:25:00UTC+00American Express Profit Slides on Boosted Customer Rewards

American Express Co.'s second quarter profit fell 33 percent, partially hit by the higher expenses, as the card company heavily invested in rewards to entice customers amid strong competition from big U.S. lenders.

Shares of the company fell 1.2 percent to trade at $84.87 in extended trading. So far this year, the stock is up 16 percent.

AmEx has increased financing on its rewards system in order to stop its mostly affluent customer base from jumping ships to JPMorgan Chase & Co. and Citigroup Inc., which have stepped-up their rewards in order to bolster their respective credit card businesses.

The New York-based company said it spent $1.93 billion on card member rewards in Q2 which ended June 30, denoting an increase of 9 percent from the same period a year earlier. The increase was the highest rise recorded since late 2014.

Net income fell 33 percent to $1.31 billion or $1.47 per share, partially mirroring the collapse of an longstanding partnership with retailer Costco Wholesale Corp. Profit was expected to clock in at $1.43 per share.

Total revenue edged up 0.8 percent to $8.31 billion, topping estimates of $8.20 billion.