UPDATE 2-Kenneth Chenault to step down as AmEx CEO next year

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Oct 18 (Reuters) - American Express Co said Kenneth Chenault will step down as chief executive early next year, ending a nearly 17-year tenure at the helm of the No.1 U.S. card issuer by spending.

Chenault, 66, will be succeeded by Vice Chairman Stephen Squeri, 58, effective Feb. 1, the company said on Wednesday.

His retirement comes at a time when the company is rebounding from the loss of big partnerships such as those with warehouse club retailer Costco Wholesale Corp and JetBlue Airways Corp.

AmEx is also battling rising competition from big U.S. banks who are targeting the company's affluent clientele. Bank of America last month launched its Premium Rewards credit card, joining rivals JPMorgan Chase & Co and Citigroup.

Chenault, one of the few African American chief executives, has managed to allay some the investor concerns through a two-year turnaround.

Shares are up about 22 percent this year and the company on Wednesday raised its full-year 2017 earnings per share expectations to $5.80 to $5.90, from $5.60 to $5.80.

Commenting on Chenault's departure, billionaire investor Warren Buffett said, "Ken's been the gold standard for corporate leadership and the benchmark that I measure others against. He led the company through 9/11, the financial crisis and the challenges of the last couple of years."

Buffett's Berkshire Hathaway is American Express' largest shareholder.

AmEx reported a 19 percent rise in quarterly profit as loan growth and higher card member spending helped offset a jump in costs.

Net income attributable to common shareholders rose to $1.36 billion, or $1.50 per share, in the third quarter ended Sept. 30, from $1.14 billion, or $1.20 per share, a year earlier.

Total revenue, net of interest expense, rose 9 percent to $8.44 billion.

Consolidated expenses surged 6 percent to $5.8 billion.

This is the first quarter without the impact of the loss of the Costco partnership. (Reporting by Pallavi Dewan and Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila and)