The provision for losses on the lending portfolio grew as a result of higher volumes and an increase in U.S. lending write-off and delinquency rates. Charge card interest expense grew as a result of a higher effective cost of funds and higher volumes. Marketing and promotion expenses were lower as TRS scaled back certain marketing efforts in light of the weaker business environment. Other operating expenses were flat, as the cost of Cardmember loyalty programs and business growth were offset by the benefit of reengineering and cost-control efforts. The attached financials present TRS' results on both a managed and reported basis.
Net income is the same in both formats.
These gains were offset by expenses related to card acquisition activities and therefore had no material impact on net income or total expenses. Net revenues decreased 21 percent. The weakened equity markets led to lower asset levels and slower growth in sales of investment products. As a result, management and distribution fees fell 7 percent. The results reflect strong performance in Personal Financial Services, higher foreign exchange revenue, security gains, and lower operating expenses as a result of AEB's reengineering efforts.