American Express(US:AXP)2024-10-18 19:10Financial Performance - Total revenues net of interest expense increased by 8% year-over-year to $16.636 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 $2.507 billion, or $3.49 per share, compared to $2.451 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 $16,636 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 $2,507 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, compared to $3.30 in 2023, representing a rise of 6.1%[152]. - Net income for the nine months ended September 30, 2024, was $7,959 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 $5,028 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 $5,473 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 $34,738 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 $1.356 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 $117,978 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 $3,893 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 $245.30 during Q3 2024[100]. - Cash dividends declared for common shares were $439 million, with a dividend of $0.60 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 $18,224 for the nine months[37]. - The average fee per card increased by 13% to $105 for the three months and by 11% to $101 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 $129.1 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 $8.9 billion of unsecured debt and $3.2 billion of asset-backed securities[106].