Jeff Campbell
Chief Financial Officer at American Express
Well, thank you, Steve and good morning everyone. It's good to be here to talk about our second-quarter results, which we are tracking with the guidance we gave for the full-year and reflect steady progress against our long-term growth aspirations. Starting with our summary financials on slide two. Our second-quarter revenues were $15.1 billion, reaching a record-high for the fifth straight quarter up 13% Year-over-Year on an FX-adjusted basis.
This revenue momentum drove reported net income of $2.2 billion and earnings per share of $2.89, up 12% Year-over-Year. This does represent a quarterly EPS record for the company and it also reflects the sequential strengthening we expect as we move through the year that I mentioned last quarter. Pretax pre-provision income was $3.9 billion, up 33% versus the same time period last year, reflecting the strong growth momentum in our underlying earnings. Now let's get into a more detailed look at our results, which in our spend-centric business model always begins with a look at volumes which you see on Slides three through seven.
In total, you see on Slide three that we did reach a new record level for spending on our network this quarter, with total network volumes and billed business up 9% and 8% Year-over-Year, respectively, on an FX-adjusted basis. Of course, I'd remind you, the growth rates were particularly elevated last quarter as we lapped to the impact of Omicron in the first-quarter of prior year. We are now seeing the more stable rates, but we expect are more representative of the kind of growth rates, we will see in the balance of the year. Goods and services spending grew 6% overall in the second-quarter. We saw a good growth in goods and services spending in US consumer and international Card Services, but 8% and 15%, respectively while this growth rate in US SME did continue to slow down a bit further from last quarter.
In contrast, we saw very strong growth in travel and entertainment spending across geographies and customer types, up 14% overall, driven by sustained demand for travel and dining experiences. Looking-forward I would expect this growth rate to remain in the double-digits through the rest of this year. Turning to our largest segment, US consumer grew billings strongly at 10% this quarter. Millennial and Gen Z, customers continue to drive our highest billed business growth within this segment with their spending, growing 21% Year-over-Year. You see our highest-growth again this quarter in International Card Services, with strong growth across both geographies and customer types.
Spending from international consumers grew 16% while spending from international SME and large corporate customers grew 19%. The strength in spending growth from our [Technical issue] consumers and Card Members outside the US, offset the continued softness in US SME spending growth that we have been talking about for the past few quarters. Looking at commercial Services US SME growth came in at 2% this quarter. Looking-forward, we will continue to monitor these spending trends. Our US large and global corporate customers also grew billings 2% in the second-quarter as we've said for many years, these customers while not a particular growth driver for our business to remain an important foundation for the company's business model.
Taking all of this into account, spending volumes are tracking to support our revenue guidance for the year and our long-term aspirations for sustainable growth rates greater than what we were seeing pre-pandemic. Now moving on to Loans and Card Member receivables on Slide eight. We saw good continued sequential growth as well as Year-over-Year growth of 15%. Year over year growth moderated a bit this quarter as we expected but remained elevated versus pre-pandemic levels. The interest-bearing portion of our loan and receivable balances continues to grow faster than the overall growth you see as our customers continue to rebuild balances.
Importantly, the majority of this revolving loan growth in the US continues to come from our high credit quality, existing customers. We also included a disclosure this quarter showing that only 8% of our US Card Member loans and receivables comes from customers with a FICO of less than 660. As you then turn to credit and provision on Slides nine through 11 this high credit quality of our customer base continues to show through in our best-in class credit performance. Our card member loans and receivables write-off and delinquency rates remain below pre-pandemic levels. Delinquency rates remained flat quarter over quarter while our write-off rates continue to move-up a bit this quarter as we expected as you can see on Slide nine. Going-forward, as we've talked about for many quarters now we continue to expect these delinquency and write-off rates to increase over time, but they are likely to remain below pre-pandemic levels in 2023.
Turning now to the accounting for this credit performance on slide 10. The quarter over quarter growth in our loan balances was the primary driver of our $327 million [technical issue]. There was also a small component from incorporating a slightly worse macroeconomic outlook this quarter relative to last quarter. This reserve build combined with net write-offs drove $1.2 billion of provision expense in the second-quarter. As you see on Slide 11, we ended the second quarter with $4.7 billion of reserves, representing 2.6% of our total loans and card member receivables. This reserve rate remains about 30 basis points below the levels we had pre-pandemic or day-one CECIL.
We continue to expect this reserve rate to increase a bit as we move through 2023, while also reflecting the continued premiumization of our portfolio. Moving next to revenue on Slide 12, total revenues were up 13% Year-over-Year in the second-quarter on an FX-adjusted basis. Our largest revenue line, discount revenue grew 8% [technical issue] as you can see on slide 13, driven by the spending trends we discussed earlier. Net card fee revenues were up 22% Year-over-Year in the second-quarter on an FX-adjusted basis as you can see on Slide 14. Growth remains quite strong and continues to be driven largely by bringing new accounts onto our fee-paying products.
This quarter, we acquired 3 million new cards and the spend revenue and credit profiles of these acquisitions continued to look strong relative to what we saw pre-pandemic. Importantly, the acquisition trends you see on Slide 14, in this and recent quarters, are consistent with our long-term growth aspirations. Moving on to Slide 15, you can see that net interest income was up 32% Year-over-Year, driven primarily by the growth in our revolving loan balances. To sum up on revenues on Slide 16, we're seeing broad-based revenue growth across our revenue lines. We're tracking with our expectations so looking-forward, we still expect to see revenue growth within our range of 15% to 17% for the full-year of 2023.
The revenue momentum we just discussed has been driven by the investments we've made and those investments show up across the expense lines you see on Slide 17. Starting with variable customer engagement expenses these costs came in at 42%, total revenues in the second-quarter and are tracking with our expectation for them to run at around 43% of total revenues on a full-year basis. On the marketing line we invested $1.4 billion in the quarter, on track with our expectation to have full-year marketing spend of around $5.5 billion. We remain focused on driving efficiencies, so that our marketing dollars grow slower than revenues, while continuing to drive the high-quality [technical issue] that Steve discussed earlier.
Moving to the bottom of Slide 17, brings us to operating expenses, which were $3.4 billion in the second-quarter also tracking with our expectation for operating expenses to be around $14 billion for the full-year. This quarter, you see that as we expected we have far less growth in opex relative to our high-level of revenue growth and looking-forward, we continue to see opex as a key source of leverage. Turning next to capital on Slide 18. We returned $1.6 billion of capital to our shareholders in the second-quarter including common stock purchases of $1.1 billion and $446 million and common stock dividends on the back of strong earnings generation.
Now, as you know, this is an off-cycle year for Amex as a CCAR bank. But let me briefly remind you of our capital management approach. We generally increase our dividend, roughly in-line with earnings and targeted 20% to 25% payout ratio and you saw us do that as we increased our dividend by 15% to $0.60 per share last quarter. We target a CET1 ratio between 10% and 11% and we ended the second quarter in the middle of that range at 10.6%. As we think about the potential finalization of Basel III, I'd remind you that our 10% to 11% CET1 target range is actually well above our current regulatory minimum of 7%.
We plan to continue to return to shareholders the excess capital we generate while supporting our balance sheet growth, and we don't expect any material near-term changes to our capital management approach driven by the evolution of these rules. So that then brings us to Slide 19 and the growth plan. To step back for a minute, I joined American Express 10 years ago in 2013, because I was excited about the long-term growth prospects for the company. Today as I join you for my last earnings call I am actually even more excited about those growth prospects. Steve and I first introduced our new multi-year growth aspirations back in January of 2022.
I would point out that Christophe was in the room for every key decision we made as we developed that plan with the senior business leaders across Amex. Now in July of 2023, we have consistently achieved the aspirations we set out six quarters ago thanks to the great efforts of our 77,000 colleagues across American Express. So, we are reconfirming today our 2023 full-year revenue guidance of 15% to 17% growth with EPS in the range of $11 to $11.40. Our revenue momentum and customer acquisition trends are positioning us well for our growth aspirations this year in 2024 and beyond.
So this momentum combined with this being my 85th consecutive earnings call across three industries without a break, makes this a good time for me to transition the CFO role to Christophe. With that, I'll ask Christophe to say a few words before Steve and I take your questions.
