UPDATE:American Express President To Leave; Co Shuffles Management

American Express Co. (AXP) President Alfred Kelly has decided to depart the company and seek a chief executive position elsewhere, the company said Monday.

Kelly has held the position of President and head of the global consumer group for about two years. He has worked at American Express for 22 years.

"Al made clear to me that he wanted the opportunity to run a company as chief executive," said Chairman and Chief Executive Kenneth I. Chenault. "Given my own plans for the coming years, we both agreed that was not likely to happen at American Express in the short term," leading to Kelly's decision to seek other opportunities.

Chenault has been CEO since 2001.

Kelly's name has been mentioned as one of several potential successors to Bank of America Corp. (BAC) CEO Ken Lewis, who said he will step down at the end of this year.

An internal memo from Chenault, reviewed by Dow Jones Newswires Monday, said, "Al has agreed to stay on until early next year to continue to lead our transition to a bank holding company and to act as a consultant to me on a variety of business issues."

The company, which unlike most rivals issues cards and processes transactions, has been hurt as customers reduce their spending and some fall behind on their bills. It has been expanding its product offerings, including recent plans to re-enter the market for personal savings deposit accounts.

American Express also announced other management and organizational changes.

The company is now grouping together global consumer, small business and network business and appointed Vice Chairman Edward P. Gilligan to head the group, effective immediately.

Due to the change, Anre Williams, president, Global Commercial Card, and Charles Petruccelli, president, Global Business Travel and Foreign Exchange, will report directly to Chenault, not Gilligan anymore, and will retain their current responsibilities, according to the internal memo.

Stephen J. Squeri was promoted to group president at its new global services organization, which will include customer-service, technologies, business processing and information management, American Express said.

According to the internal memo, American Express will "continue to make significant investments in this area."

Additionally, a new Enterprise Growth group to drive the company's entry into new payment areas, among other things, is being established.

"This group will focus on leveraging our existing assets and capabilities to drive new revenue growth and will identify emerging payments technologies that can extend our leadership beyond the traditional payments arena," the internal memo said.

A senior leader from outside American Express will be recruited for the position and Chenault expects to announce the hire within the next couple of months, according to the internal memo.

(Tess Stynes contributed to this article.)

-By Jessica Papini, Dow Jones Newswires; 212-416-2172; [e-mail]