Workflow
American Express(AXP) - 2024 Q3 - Quarterly Report
AXPAmerican Express(AXP)2024-10-18 19:10
Transcript
Slide

Financial Performance - Total revenues net of interest expense increased by 8% year-over-year to 16.636billionforQ32024,andby916.636 billion for Q3 2024, and by 9% to 48.770 billion for the nine months ended September 30, 2024[13]. - Net income for Q3 2024 was 2.507billion,or2.507 billion, or 3.49 per share, compared to 2.451billion,or2.451 billion, or 3.30 per share in Q3 2023, reflecting a 2% increase in net income[14]. - Total revenues for the three months ended September 30, 2024, reached 16,636million,anincreaseof8.216,636 million, an increase of 8.2% compared to 15,381 million in 2023[152]. - Net income for the three months ended September 30, 2024, was 2,507million,upfrom2,507 million, up from 2,451 million in 2023, reflecting a growth of 2.3%[152]. - Basic earnings per share for the three months ended September 30, 2024, increased to 3.50,comparedto3.50, compared to 3.30 in 2023, representing a rise of 6.1%[152]. - Net income for the nine months ended September 30, 2024, was 7,959million,upfrom7,959 million, up from 6,441 million in the same period of 2023, reflecting a year-over-year increase of 23.6%[161]. Revenue and Expenses - Non-interest revenues increased by 7% to 5,028millionforthethreemonthsendedSeptember2024,andby85,028 million for the three months ended September 2024, and by 8% to 14,823 million for the nine months ended September 2024 compared to the same periods in 2023[46]. - Total expenses rose by 12% to 5,473millionforthethreemonthsandby95,473 million for the three months and by 9% to 16,098 million for the nine months, mainly driven by higher Card Member rewards and marketing expenses[46][52]. - Total expenses for the nine months ended September 30, 2024, were 34,738million,anincreaseof4.534,738 million, an increase of 4.5% from 33,229 million in 2023[154]. Credit and Loans - Provisions for credit losses rose by 10% year-over-year to 1.356billion,primarilyduetohighernetwrite−offs[13].−TotalloansandCardMemberreceivablesincreasedby101.356 billion, primarily due to higher net write-offs[13]. - Total loans and Card Member receivables increased by 10% year-over-year, indicating continued growth in lending[17]. - Card Member loans reached 134,548 million, reflecting a 14% increase compared to 117,978millioninthepreviousyear[40].−Thenetwrite−offrateforprincipal,interest,andfeeswas2.2117,978 million in the previous year[40]. - The net write-off rate for principal, interest, and fees was 2.2% for the three months ended September 30, 2024, compared to 2.0% in the previous year[40]. - Total provisions for credit losses rose by 10% to 1,356 million for the three months and by 12% to 3,893millionfortheninemonths[27].ShareholderReturns−Thecompanyreturned3,893 million for the nine months[27]. Shareholder Returns - The company returned 2.4 billion to shareholders through share repurchases and dividends during the quarter[19]. - The company repurchased 7.7 million common shares at an average price of 245.30duringQ32024[100].−Cashdividendsdeclaredforcommonshareswere245.30 during Q3 2024[100]. - Cash dividends declared for common shares were 439 million, with a dividend of 0.60pershare[167].CustomerMetrics−Billedbusinessgrewby60.60 per share[167]. Customer Metrics - Billed business grew by 6% year-over-year, with U.S. Consumer Services and International Card Services showing strong growth of 6% and 13% respectively[15]. - Average proprietary basic Card Member spending increased by 2% to 6,110 for the three months and by 2% to 18,224fortheninemonths[37].−Theaveragefeepercardincreasedby1318,224 for the nine months[37]. - The average fee per card increased by 13% to 105 for the three months and by 11% to 101fortheninemonths[37].RegulatoryandCompliance−ThecompanyisnowclassifiedasaCategoryIIIfirmunderU.S.federalbankregulatoryagencies,subjectingittoheightenedcapitalandliquidityrequirements[129].−ThecompanyisrequiredtosubmititsinitialresolutionplanundernewFDICrulesbyJuly1,2026,withaninterimsupplementduebyJuly1,2025[130].−Thecompanyiscooperatingwithongoinggovernmentalinvestigationsrelatedtohistoricalsalespracticesandcompliancewithconsumerprotectionlaws[129].MarketandEconomicConditions−Thecompany’sfinancialperformancemaybeimpactedbymacroeconomicconditions,includingrecessionrisksandinflation[144].−Futurerevenuegrowthwilldependoneffectivemanagementofoperatingexpensesandrisk,aswellassuccessfulexecutionofthesharerepurchaseprogram[144].−Thecompanyanticipateschallengesingrowingrevenuesnetofinterestexpenseduetocompetitivepressuresandchangesinspendingvolumes[144].CapitalandLiquidity−ThecompanymaintaineditsCommonEquityTier1(CET1)capitalratioat10.7101 for the nine months[37]. Regulatory and Compliance - The company is now classified as a Category III firm under U.S. federal bank regulatory agencies, subjecting it to heightened capital and liquidity requirements[129]. - The company is required to submit its initial resolution plan under new FDIC rules by July 1, 2026, with an interim supplement due by July 1, 2025[130]. - The company is cooperating with ongoing governmental investigations related to historical sales practices and compliance with consumer protection laws[129]. Market and Economic Conditions - The company’s financial performance may be impacted by macroeconomic conditions, including recession risks and inflation[144]. - Future revenue growth will depend on effective management of operating expenses and risk, as well as successful execution of the share repurchase program[144]. - The company anticipates challenges in growing revenues net of interest expense due to competitive pressures and changes in spending volumes[144]. Capital and Liquidity - The company maintained its Common Equity Tier 1 (CET1) capital ratio at 10.7%, within its target range[19]. - As of September 30, 2024, customer deposits increased to 135.4 billion from 129.1billionasofDecember31,2023,representingagrowthof2.3129.1 billion as of December 31, 2023, representing a growth of 2.3%[105]. - The company issued 12.1 billion of debt in the nine months ended September 30, 2024, including 8.9billionofunsecureddebtand8.9 billion of unsecured debt and 3.2 billion of asset-backed securities[106].