Core Insights - Consumer demand for elite credit cards remains strong despite significant fee increases, with American Express (Amex) reporting higher-than-expected early demand for its revamped Platinum card [1][2] - The new Platinum card, launched in September, has an annual fee of $895, and new account acquisitions have doubled compared to previous levels [2][3] - Amex's CEO noted that retention rates for existing cardholders have remained stable post-refresh, with a $200 fee increase not affecting them for a few months [3] Company Performance - Amex reported $421 billion in billed business during the third quarter, indicating robust transaction volume on its products [7] - The stock price of Amex increased by over 7% by mid-afternoon following the earnings call [7] Market Trends - The luxury credit card market is competitive, with other companies like Chase and Citi also increasing fees and introducing new products [4] - Chase reported its best year for new account acquisitions for its Sapphire portfolio, indicating a similar trend in consumer interest [4] Target Demographics - Amex's Platinum card perks are appealing to a broad range of consumers, particularly millennials and Gen Z, who made up 75% of new platinum and gold accounts in the first quarter of last year [5][6] - Younger cardholders are completing approximately 25% more transactions than older cohorts, highlighting their engagement with Amex products [6]

Financial Data and Key Metrics Changes - The company reported net income of $3.8 billion and earnings per share (EPS) of $1.86, with a return on tangible common equity (ROTCE) of 8% [4][16] - Adjusted EPS, excluding goodwill impairment from the Banamex transaction, was $2.24, with an adjusted ROTCE of 9.7% [4][16] - Revenues increased by 9% year-over-year, reaching $22.1 billion [4][16] - Total markets revenues were up 15%, with expenses of $14.3 billion increasing by 9% [17][24] Business Line Data and Key Metrics Changes - Services had record revenues growing by 7%, with assets under custody and administration up 13% [5][24] - Markets revenues increased by 15%, driven by fixed income and equities, with equities revenues up 24% [25][26] - Banking revenues surged by 34%, with investment banking fees up 17% [27][28] - Wealth management revenues rose by 8%, with record net new investment assets of $18.6 billion [7][29] - U.S. Personal Banking (USPB) revenues increased by 7%, with branded cards revenues up 8% [31] Market Data and Key Metrics Changes - Cross-border transactions increased by 10%, and U.S. dollar clearing volume was up 5% [24] - The company reported a 115% average liquidity coverage ratio (LCR) and maintained over $1 trillion in available liquidity resources [22] Company Strategy and Development Direction - The company is focused on simplifying operations and investing in technology to enhance agility and modernize banking services [10] - A new partnership with BlackRock was announced to manage $80 billion of client assets, aligning with an open architecture strategy [7] - The company aims to achieve an ROTCE target of 10% to 11% next year, with continued investments in transformation and technology [40] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment is resilient, with the U.S. economy driven by consumer spending and tech investments [12][14] - The company is cautious about pockets of valuation frothiness in the market and is focused on maintaining discipline [12] - The outlook for 2025 includes expectations for revenue growth exceeding $84 billion, with net interest income (NII) expected to rise around 5.5% [38][39] Other Important Information - The company returned over $6 billion in capital to shareholders during the third quarter, with $5 billion in share repurchases [9][22] - The agreement to purchase a 25% equity stake in Banamex is a significant step towards divestiture and de-consolidation [9][36] Q&A Session Summary Question: Update on actions related to the consent order regarding risk compliance and controls - Management reported that over two-thirds of programs are at or near target state, with significant progress in compliance and risk management [42][43] Question: Transformation expense for 2025 - The transformation expense is expected to be slightly under $3.5 billion in 2025, with efforts to execute more efficiently [46] Question: Thoughts on the Banamex transaction and timing for IPO - The 25% stake is a significant step towards de-consolidation, with regulatory approval expected to take 9 to 12 months [52][54] Question: Pace of Stablecoin adoption and its importance - Management sees tokenized deposits as a key area of investment, with increasing demand for real-time money movement solutions [60][61] Question: Efficiency path for next year and potential for lower expenses - Management anticipates a path for lower expenses in 2026, targeting an efficiency ratio below 60% [70][72]

Financial Data and Key Metrics Changes - The company reported net income of $3.8 billion and earnings per share (EPS) of $1.86, with a return on tangible common equity (ROTC) of 8% [4][16] - Adjusted EPS, excluding goodwill impairment from the Banamex transaction, was $2.24, with an adjusted ROTC of 9.7% [4][16] - Revenues increased by 9% year-over-year, reaching $22.1 billion, with positive operating leverage across all five business lines [4][16] Business Line Data and Key Metrics Changes - Services revenue grew by 7%, driven by cross-border transactions and U.S. dollar clearing [5][24] - Markets revenue increased by 15%, with fixed income up 12% and equities up 24% [26] - Banking revenues surged by 34%, with investment banking fees up 17% across all products [27] - Wealth management revenue rose by 8%, supported by Citi Gold and the Private Bank [29] - US Personal Banking (USPB) revenue reached $5.3 billion, marking 12 consecutive quarters of positive operating leverage [8][31] Market Data and Key Metrics Changes - Assets under custody and administration increased by 13%, reflecting strong client engagement [24] - Cross-border transactions were up 10%, and U.S. dollar clearing volume increased by 5% [24] - Average loans in markets increased by 24%, driven by financing activity [26] Company Strategy and Development Direction - The company is focused on simplifying operations and investing in technology to enhance agility and modernize banking services [10] - A new partnership with BlackRock was announced to manage $80 billion of client assets, aligning with an open architecture strategy [7] - The company aims to achieve an ROTC target of 10% to 11% next year, with continued investments in transformation and technology [40] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment is resilient, with the U.S. economy driven by consumer spending and tech investments [12][14] - The company is cautious about pockets of valuation frothiness in the market and is focused on maintaining discipline [12] - Management expressed confidence in exceeding $84 billion in revenues for the year, with expectations for continued growth in net interest income [39][38] Other Important Information - The company returned over $6 billion in capital to shareholders during the third quarter, including $5 billion in share repurchases [9][22] - The agreement to purchase a 25% equity stake in Banamex is a significant step towards divestiture and de-consolidation [9][33] Q&A Session Summary Question: Update on actions related to the consent order regarding risk compliance and controls - Management reported that over two-thirds of transformation programs are at or near target state, with significant progress in risk and compliance areas [42][43] Question: Transformation expense for 2025 - The transformation expense is expected to be slightly under $3.5 billion in 2025, with efficiencies anticipated to reduce this in 2026 [46] Question: Thoughts on the Banamex transaction and timing - The 25% stake acquisition is a significant step towards de-consolidation, with regulatory approval expected to take 9 to 12 months [54][55] Question: Stablecoin adoption and its importance - Management sees tokenized deposits as a key area of investment, with increasing demand for real-time money movement solutions [60][61] Question: Efficiency path for next year - The company aims for an efficiency ratio below 60% in 2026, with a focus on maintaining top-line momentum and managing expenses [70][72]