By Burney Simpson
It was not a Happy New Year for Kenneth Chenault, the CEO and Chairman of American Express Co. and one of the most powerful African Americans in the global financial industry.
Investment firm Fidelity Investments said it would end its 12-year card partnership with AmEx and Bank of America, and move its card business to Visa and US Bancorp, according to Reuters. Fidelity has 24 million customers.
AmEx stock dropped 2.8 percent on January 4, the first official business day of 2016, tanking along with much of the market. This follows the more than 24 percent decline in AmEx stock for all of 2015.
The Fidelity AmEx card offered 2 percent cash back on purchases, and cardholders had earned more than $1.1 billion in rewards since the two financial giants hooked up.
An AmEx spokesperson said the card represented less than 1 percent of the firm’s annual business, though cardholders spent about $11 billion on it annually according to Fidelity President Ram Subramanian.
Last year, warehouse retailer Costco ended its card partnership with AmEx, moving the business to Visa and Citigroup. Chenault told analysts the Costco-cobranded card accounted for about 10 percent of AmEx’s 112 million cards, and as much as 8 percent of spending on all its cards, Bloomberg reported.
Chenault has steered AmEx since 2001 through competition with the likes of Visa, MasterCard, JPMorgan Chase, and Citibank. It remains a financial powerhouse, with assets of $159 billion, and annual revenues of $34.3 billion.