NEW YORK CITY, New York: As it sets aside more funds to cover potentially bad loans, American Express announced that its fourth-quarter profits fell by 9 percent.

The company also witnessed a rise in charge offs and delinquencies, a troubling sign, as its customer base is usually wealthy and creditworthy.

The New York-based company also announced a plan to raise its quarterly dividend and forecasted higher-than-expected profits for 2023, noting that it earned a profit of $1.57 billion in the quarter, down from $1.72 billion in the same period in 2021, and below analysts' forecasts.

While AmEx cardmembers spent $413.3 billion on their cards last quarter, it has also witnessed a noticeable deterioration in its customers' financial health and set aside $1.03 billion to cover potential credit losses, compared to only $53 million in the same period last year.

The company wrote off 1.3 percent of its total loans, compared to only 0.8 percent one year earlier, and the number of card members who were 30 days or more past due also increased.

In a statement, AmEx CEO Steve Squeri said that the company's credit metrics "remained strong" in the quarter, and it is seeing few signs of a recession in the short-to-medium term, noting that cardmember spending continues to remain strong.

Jeff Campbell, AmEx's chief financial officer, said, "The increase in delinquencies was expected and they do not expect credit losses to get to where they were before the pandemic. Other credit card companies have seen much larger rises in delinquencies, notably Discover Financial, whose stock fell sharply this week after it reported its results," as quoted in the Associated Press.