American Express (AXP) 20 Oct 232023 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2023 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to our host, Head of Investor Relations, Ms. Kerri Bernstein. Thank you. ahead. go Please

and Donna, all joining for Thank thank call. today's you, you

are today's before The business forward-looking These slides uncertainties. current with Factors contains well today's reminder, results for presentation earnings risks and a GAAP measures. the cause differ non-GAAP discussed. subject discussion and and we on discussion are expectations we in reports performance. that future As are and company's materially quarter's begin, file contains from prior in the are included on as to measures also statements management's SEC. The today financial the statements this financial materials included comparable actual could financial our based periods the in to about earnings as these materials

our progress are with then will provide will results. to a who Financial Steve. website ir.americanexpress.com. We'll move of both results over these and Squeri, company's on the turn begin let start Christophe performance. Steve session Caillec, Steve of posted the it we'll a with financial me today and Chairman review Officer, about at with to All Chief Christophe. With CEO, Le And that, Q&A that, After some more remarks detailed and our on

credit up powers a in year-over-year we the from third Member the reservations portion on remain is the and booked in with the of set generations platform the and premium of for in new unique the to reservations the the many small factors, U.S. payments quarter. In and discipline our beyond robust, platform, brand. up we've the base, base, saw relationships growing of up U.S. our International consistent management is was services, partner reached to A consecutive continue our with increased Earnings And billion, We quarter. card plan slightly ability company year XX% something we're year-over-year. third the our customer than revenue remained the performance steady-state Card the U.S. positioned spending record. the Power in of the that value the aligned as seeing particularly and our continue on levels number macro XX% in performance, investments Thank in our drives We've includes highly with of factors spending risk the strong basis. continue up in integrated and propositions quarter are and J.D. a across quarter, than credit strong, of in account this of our on care operate business differentiated continuing Based more all excess on and and ago. Millennial businesses X%, time today and products seek XX% a the continue earnings the model, an of over our continue innovating we know continued all T&E over $X.XX It we we XX% the year more areas achieve largest year is guidance is been which performance and platform the on grow the U.S., accounts EPS example Card growth all you, by on including QX, for fastest-growing us also results focus one our in and share quarter. Kerri. all products, strategic which represented of revenue our the from consecutive growth we've significantly. full momentum acquisitions new this. several portfolio. Demand last rated growth global to age consecutive in have segment, platform trusted of consumer our thanks making third FX-adjusted dining FX-adjusted making momentum in; of few geographies with of announced seen acquired on the $XX.X aspirations of continue building #X annual cycle a The for strong deliver categories confidence leverage of was X% business focus we've we retention. Resy Good restaurants new we per Card to we're and to best-in-class, which date, in We quarter years accounted provided the momentum beginning XXXX. And growth was our the confident us which EPS basis. satisfied year. growth the opportunities as Members another quarterly of our based be record Spending and of good Member out groups. Resy to consumer reason spending a of for call. QX segment, some that of environment. My attractive XXXX XX fee-based to on XX% business; of past high that key these virtuous as seventh and were success strong up the growth; the relevance Resy In across key in our quarterly be year-over-year, plan at users, annual to morning, in for for record. our driven years, membership Services because a joining about. Gen restaurants the revenues, X the in and for generational well our consumers the strongest which we customer quarter we remain investments that Together, globally of ways Card in including to doing is because was the invest acquired we strong growth model, and satisfaction with years engagement demographic study. And for in the been achieve Customers our and our sixth they the built XXth remain an quarter. available to Z to fourth products metrics and mid-teens our XX% fastest-growing ability be

and appeal years, Over the the across also number and ramped last and sponsorships exclusive our Members up experiences, few the we we've access unique of Card offer to events value generations lifestyle reinforce to membership. geographies of that

in popular to they be week, generate Our X partner X we our partners across sponsorship, to cut over Members add exclusive on sponsorship official first ways a branded new interest of engagement years, of prospects. They represents They with Americas. art build opportunity this X and fashion. popularity announced on-site in and is also Formula latest us power continue drive Formula for growing world-class the to experiences great work membership. the world. it to XX the racing with strong around highly the vertical with among activities and new our sports, experience our entertainment, agreement who Amex attract offers payments This an and Formula Earlier the of Card multiyear sports rapidly prospects help food, to our and

and These age delivering regularly our is to in products all we're product the and are interest patterns market. our each generational customers value spending tailored adding by global refreshing enhancements on of local to relevance of way basis. groups Another a

the this far made So to across over we've premium XX year, enhancements products company.

like enriching and provide drive that Some helps and of U.S. Gold additional offers just customers them yesterday, us of our in and co-branded experiences current examples Japan, our Card others in Hilton retention deliver deepen business were the value. the further model, our are of Cards. These who Consumer latest attract which refreshes and premium new engagement products Platinum membership many which Card and and partners with more merchants add customers, our

We'll to where about gives additional of our relevance, feel our we differentiated of Christophe our strategy I ahead, strength now and while growth continue going. continuing model, on hand leverage the adding deliver Looking for over Caillec to Le very model where value generational a more business results. we're competitive and detail for quarterly all to to the advantage. I'll investing of our which are membership call good us

The perspective resources. is company a key and growth. on morning, which on share discipline we third quarter. I enabler use environments. driving the focused to the been has have call, our we first Thank discuss strong to my be where outset EPS earnings good been our like profitable that my is everyone. the very to here reflected has company to various momentum, revenue in as minute you, a in someone I'm high and deploy growth of the through business excited and would our continued one Steve, take levels long revenue A of for who record at time

we very have As sustainability the a seeing. business confidence in of result, drivers quality I our the is that and are the underlying of strong, growth

a versus We have of EPS billings power accelerated net described. direct million compared of growth is The the In the quarter, revenue our more our and This That year the $XXX quarter. a underpins company in of $X in result strategy about which model. also to strategy revenue acceleration that growth driven almost generating last since more that billion plan, income billion earnings in is more ago. before pace Steve the the and our has $XX pandemic. business demonstrates

on of this X. quarter's look starting Now Slide our at let's financials a details performance, take summary the with

Third year-over-year. income of revenue were XX% billion. This per high billion $XX.X for quarter grew sixth share year-over-year. the drove revenues and reported quarter momentum of XX% $X.X record a were reached earnings and They which up $X.XX, straight net

with by with dining double-digit spending. by growth spending, category, experiences, basis. our growth in Goods driven more consistent grew see Total of an Slide look versus than sustained year, X% begins driven business This & billion this with look network our last Entertainment X% now growth we & Travel on at we that basis Billed largest travel growth Services detailed grew last has Let's quarter. Total double-digit spending, X. growth volumes a quarter's more results. business, rate year-over-year restaurant for at rates demand drivers in on FX-adjusted XX% been spend-centric up on an starting Billed quarter up through expected. This model, to FX-adjusted and T&E continue the In continued go this growth business was a and $XX as stable the these X%

exited see at note we the process quarters As of is this expect the results, to that in few until volumes. last in continue reported you that look quarter growth the I'd growth small product exist. rate QX impact was next rate. lap for reflected these we the our This a I'd year-over-year

of play solutions that our payment total these reminder, alternative Slide you The and portion volumes cards volumes on volume associated up As from from more XX. a which we where process of see with revenue, we includes a network facilitate. can role makes a small revenue

we largest break Starting our on then take strongly our a X% spending across Consumer points with few at billings U.S. As down segment are Slide this our grew X. away. other trends key quarter. to there businesses,

on age this quarter. cohorts. Our and our attracting, business retaining focus across with growth Millennial and billed to customers card our driving generations this their highest continue engaging spending drive premium members segment, growth Z all XX% and within is Gen up

Commercial on X. at SME this rate. at quarter's in U.S. X% Looking Services last with quarter, growth Slide growth consistent came

discussed businesses past slowed given dynamics this by organic growth has Steve our As on small few years. seen segment call, QX in the over unique

accounts Importantly, do for demand high-quality new segment. strong continue see within we to this

Billings SME help were from we corporate forward, to Looking continuing clients our businesses. U.S. year-over-year. global run customers large on flat their and focus

few customers Slide for we driver our business are everything our aspirations and year for Taking spending to with of talking see not for important XX%. again you quarter are in greater international see from about guidance tracking we've what for have X, full growth strength -- spending types, many from Services. support U.S. large were Overall, saw generating Consumers growth highest to corporate softness geographies and and an and services model. And the our account, strong offset the U.S. remain the across years, growth past Consumers grew these we they International than our outside that SME into foundation sustainable the the and continues a growth for growth our our this company's in quarters. major commercial volumes Card customer said We on International customers revenue Members but pre-pandemic. our Card business, spending rates lastly, for been long-term from As each

on receivables and moving well XX% Slide to on Now as continued saw X. sequential We loans growth Card as good year-over-year growth. Member of

than and loans balances, of grow our our overall As the continues the faster continue to customers interest-bearing to receivables growth portion balances see. rebuild you

Importantly, of tenured customers. in our growth from over our continues loan XX% come U.S. revolving the to

XX, our base and high-credit continues turn As Slide in provision to of credit on our to quality credit the performance. show you X best-in-class then through customer

receivables, see X, can quarter delinquency on remained Member our and Card you Slide write-offs flat both As to below pre-pandemic fairly loans and rates last and levels.

many forward, talked to in now, delinquency this and to and for about they're quarters fourth we've pre-pandemic Going increase quarter. we levels as to below remain write-off continue likely overtime, rates expect the

delinquency net of combined quarter-over-quarter expense in provision to royalty Slide reserve performance Turning drove with Member combined modest the in $XXX The quarter. the billion in resulted build. this now credit loan with a reserve rate, loans accounting in on our third our a of X. build, and receivables $X.X balances, increase million Card write-offs, This

X.X% the Card total ended This we the rate reserve of representing had with As you points billion receivables. reserves, third X XX Member CECL. day below XX, quarter basis level see we of remained and pre-pandemic or our $X loans on Slide about

reserve We the the increase bit the expect balance few past the modest seen year, to to over continue of this a to rate increases we've quarters. similar in

revenues $X.X or Moving the up billion next were XX. third Slide in year-over-year quarter. to on revenue Total XX%

we've XX, X% discussed Our grew up see we XX. existing our to and by card as basis, can made year-over-year very in line continued Slide as trends our see can investment you XX% premium powered is products revenue attractiveness revenue This were of in FX-adjusted you year-over-year Net by Slide revenues fee on QX, remains value discount due spending growth both strong new on the an on fee-paying earlier. propositions. largest to and driven customers the

As expected, this quarter product a saw moderated from levels year, our earlier cycle growth we this bit the of high reflecting refreshes. we

This we X.X quarter, cards. acquired million new

new you aspirations. credit our Members pre-pandemic. Importantly, look Slide continue long-term see profile Card acquisition and remain growth we on saw our XX strong relative spend, consistent the revenue levels The what to with of to

on Slide Moving XX. to

interest year-over-year sum our net up balances. To revenue that in mostly see on FX-adjusted can XX, seeing an up driven basis, You our across we're lines. broad-based momentum on loan diversified growth revenue XX% income by the revenues was revolving Slide

expect January the we at For for the in within XX% revenue be growth XXXX, range year. communicated around to full we growth

expenses Therefore, of year of total costs full to XX. third the around Moving I now Slide XX% engagement year expect basis. these revenues customer expenses came full run in the -- the to on in quarter. total Variable XX% at at on in revenues

engagement to Looking Card view as earlier. forward, discussed as attract this our driver our ones, value Steve we cost to a to Members key of momentum as our premium innovate deepen we and propositions with new continue

talked great investment really good opportunities. our new see about attractive a about have the wide our marketing quality in card expect I the range invested fairly to $X.X acquisitions, continue and we marketing still around billion line, feel spend for We quarter. expense. billion full to of demand our which products across I the for flat the On of earlier, $X.X to XXXX I year, of

the to in this that increase acquisition I of our spend our expect to set an sophisticated we're so of in And marketing do year. this confident balance would opportunities, efficient will engine Given continue way. strong

expenses account, to Slide and operating this into invest brings expenses, were areas, we bottom $XX.X base $X.X our Moving technology. we quarter talented operating billion of expect our XX as to as third year around to the colleague such in Taking billion. in full which the critical us now be

forward, of Looking as key leverage. view to marketing OpEx continue we a and source

the of to our stock dividends, billion $XXX common billion third of to back next the all generation. earnings returned of $X.X on Slide in and XX. shareholders This quarter. $X.X strong common repurchase on Turning stock million We capital in capital included

XX, on a above between regulatory quarter of ended As well see you XX.X%, we ratio XX% to can CETX a XX%. target We ratio CETX Slide our the of X%. minimum with current is which

requirements is the Basel we improvements if about the opportunities and could there the the clear regulatory capital for As final proposal proposal written. rule. buffer the are think between proposal, consume III Notably, we increase as above RWA adopted believe the

issues we in sheet while return broadly, shareholders regulators continue rules In post We that actively excess guidance dialogue. XXXX to our capital fact, on in and We to changes potential to these applying management about to questions balance themselves plan the engaged are have generate, and material not plan me growth. brings we near-term expect supporting capital do growth our to any Slide XX. approach. That our the

momentum quarter I results reflect streams. we've strong As discussed our Steve and third of continuation evidenced over across our last built quarter the revenue few the third by performance our years, results, diversified a in

growth range with full the the guidance the consistent revenue around beginning the expect year, year. we at XX%, of For we revenue of provided

expect before, to for expectation. On on of total to expect $XX.X invest variable marketing, discussed per now be year. now we our success. Taking still to below spend $XX to earnings we the our be $X.X $XX.XX. original lastly, our we full revenues everything in And critical as around a share billion modestly together, around year, between areas year expectation expenses I operating above we original modestly this engagement our Card As expect remains Member around expenses and billion guidance basis, full our XX%

to moment. A here and committed revenue Looking environment. With at a the our remain business forward, Kartik welcome that, Relations focusing Ramachandran, for Treasurer. the call in years the thank move function American point critical to our positions EPS to a macro sustainably of his with number like open growth delivering Investor had in company. I'd for growth a our was for decided achieving of XX have finance performance Bernstein period lead of we'll the your to Kerri a in over of Kartik XX% Steve Head our a which we of steady-state on mid-teen like and Express. final and aspirations Relations. has excess I most up goal company. consumer questions strong in I'd relates team to recently IR key U.S. to of during Corporate Investor then leading the new finance Kerri

let call Now to the turn me questions. over for it your to up open Kerri back

Christophe. you, Thank

ask we will the I will up for Before for question. please with open for in the one just open those your Thank questions. you the Operator? to queue operator line up Q&A, cooperation. And that, lines the yourself to now limit

KBW. Instructions] from Sanjay Sakhrani of [Operator first Our is question coming

do on changes backdrop Congrats, you outlook? Christophe, past question. you just a lot Kerri, if choppy sanguine might the unfazed? been Kartik. on point, qualification behavioral over process. curious in you've on impact. the related macro the has any curious seen quarter I you've a impact the Steve, Delta to stuff, feel that And the seen just like your headlines customers lot a are there's hear of Delta just I'm know I'm changes We its that just and about any on a if Medallion more spending. Or made the make

Yes.

thanks, Sanjay. So

Let me Delta with start first.

think Delta partner things team And I made think good in makes very in got or And as some have and changes, The some they're as is and they made of fashion. But other the Delta reaction, far has a way. be very all I it changes, a impact. them changes. think a about lockstep some received had the card one with customer-focused we're which zero acquisition, having they as -- been as spending I will organization. great

acquisition. a spending haven't or from card seen from we on card a anything So Delta

up Delta was fact, XX%. almost In year-over-year spending card

feel that. pretty we So good about

the & we've Card spending T&E, base. talk have And perspective. let's perspective very I Services strong. X% high-quality one an both continues is T&E from an and growth Goods that metrics And U.S. just far Goods think be everybody card really growth and the small from And spending, We credit services piece base U.S. overall really a high It's Member. of from consumer a we U.S. and strong international on to & International such it's and is U.S. consumer XX% International great as XX% Consumer. that important a have card the a the As economy. remind on perspective, of off reasons seen Services, I'll and about strong X% consumer, had we a our still

they answer. point I by we at same that anything. now, which this our at the business, we're calls in and the the question this And that I growth. impacted been the is much same manage last for for so right blue-chip And time the And is in still year. probably you only pretty more economic thing probably we had And can other business time, look, the strong used of what gave forecast, But would not you have say seeing same.

on So Christophe steady-state really I on environment, our plan, delivering as a delivering said. about feel macro good in

are to said in We well positioned deliver And we're well positioned. continue our growth as plan. to remarks, I on my

from coming is question Sachs. Goldman next of The Ryan Nash

to order given more lastly, expect do And billings revenue can And lending maybe what's question, just into growth growth? to revenue drive to see Look, of in as Sanjay's double-digit was drivers you still order about you just next drive backdrop. to on the or to solid the economic are improve the the a follow-up you double-digit see need to talking we to year. it obviously, growth be you're challenging in growth? like then good But revenue see, some able pieces billings given going about to And talk in growth? this leaning

of a Ryan. are those lot Well, questions,

I know. Trying to put in one, there.

good. That's

revenue. growth aspirations had, from grow and with card we we parts. for grow fee put actually our is current do revenue that The leave there revenue growth Exactly. we look just that We you We are. that long-term model, one in billings billings when revenue You asked right. a perspective. from at us what in it revenue Yes, We'll perspective. to one, have alone. But the from grow many a lending you only a multiple our ways line are perspective, current growth grow

major billings new invested driver perspective, new card to good probably acquisition. -- a And -- is We'll our going billion and invest approximately that. From like I'd revenue really we that the this fees. we've really we fee a year. It's are perspective, we're fee next where growth look, to step acquisition. -- of up actually about not we've feel $X.X So point is this year. that from card It's raising we out,

we're So confident in card very our acquisition.

responsibly Christophe there this was lot is believe, opportunities multiple our Members, stool we've Members a there for perspective, lend to various continue we model. times, at were than time. a from think that points it's better revenue XXXX. said, deliver of and going our double-digit X-legged And book book next which will It's in to And Card out needs year. various revenue, our and if we our we're able As our have to lending that us. And in I growth continue great mentioned of to provide confidence be today, Card will

on And side. point maybe, the can one I Ryan, lending add

As Card Steve XX% premium a Members coming of we're are that customer have base, balances of customer we growing know base. the lending And premium well. that established from said, we

with share of needs. we're spend, those on what relationship big a historically, under-index of Card is that So Members here share and And share smaller we debt we know their their bigger -- just them capturing with revolving competitors' doing of a we revolve a the capture products. lending. deepening And

from The next of William Bob question Napoli Blair. is coming

everyone. you luck. good and to been working with Kerri it's great Congratulations

the business. That's only important So growing a SMB a you, question, really business it's Steve, on for X%.

into give a -- are XXXX? And SMB? about can what there color But is you what's large in going we SMB think I on maybe move little your as on there. opportunities thoughts

Yes.

growth. the a been quarter in this row. is probably It's think I second low

haven't was driven our a growth it from by really lot growth, think business I and as lot much of of seen high a perspective. organic organic growth small we a --

And from lending out that the and over through are still last we're We're about an think are having in very not interesting years lot that think very of businesses small went then the acquisition inventory I there. a a up stocking cycle of perspective, happy opportunities on still the there. happy inventory. out terms about opportunities few I

services a footprint opportunity business us. still our on billings forth. our your were small very a of it's albeit for part restaurant, And business, X or is slow, share businesses, so positive still perspective business And a to that but it's variety And the remind small a huge professional from perspective. we relatively across it's quarters retail last so we're people, construction and whether of in small and big

feel that good back. about think we'll come just organic we very business. I on And But we're see So small does still it. positive still when

JPMorgan. Shane next coming The is question from of Rick

We Kerri. really enjoyed you working with Christophe. and Congratulations,

to a looking what that are rates comment little I'm you what those Can forward forward. raising shift issue. have a Obviously, that was products? don't the just changing one mix be. and outlook you dialogue. reserve we as There that's I of more terms We economic not question. about because modestly move rate in mix assuming it's the a in know will shifting about a the are talk reserve bit of components for function different

Yes, yes, yes.

still going on. normalization a So -- bit like is there the of trend

reserve strong here. of a rates, know well, of should delinquency you there's I bit, I if see that and they're to you you effectively course, at flat that's squint going are those points basis as historical a our increase. rates said couple little you increase what rate little if to to peers. you're normalization to fairly and look a that meant a of very when performance rates So bit And delinquency little write-off relative happening still But bit. relative But our expect

just comment. little concern It's gives preempt we a So to there's that are nothing in seeing. what that me bit

question is Wells next Don coming Fandetti The Fargo. of from

at that's seems big the want pretty unchanged? that. message RWAs has might mean Basel Just endgame, in to dial maybe it on buybacks Christophe point? message on still some get increase the that like and the back thoughts -- is the have I a you your III to ultimately

Yes.

set X,XXX complicated a know, you as is, this pages. So rules over of like

for thinking So the let about it we me you and Basel to III. try way summarize are

capital, the first, in of ourselves to remind right we point lot I XX% range. starting think generate ROE is a that, the

starting at XX% of CETX element target with The to although capital operate X% XX%. at of is that point actually the a regulatory we our is second -- X%,

comment consumed my adopted And the to to rules that currently north buffer XXX drafted. points be was meant could that's basis I they III XXX regulatory of the Basel level. as in say if what are by that, So say to

that saying for And card, to of XX%, that of such about we highlight way do ours from healthy as and these is as regulators capital some are to of to are but their what's revenue the the rules our figure rules regulators Another right today our we visible, also charge fees the about those fees know, to over post rules. I given need is you reference very XX% thing instance, themselves, And card same level thing engaged such those questions that with here. applicability as bit actively the fact businesses the fees, of earlier. in out business. the stable, a the comes talked the

we'll where we management now, policies land. for expect change near-term our see and knows. any don't one So But to I No capital practices.

next The Morgan question of from Stanley. Adelson Jeff is coming

It to you're little quarter, of bit And account Just wanted like slowing add focus a a spend and although per in looks marketing your cards finally the that on X back you as to little it more it bit little account your a to is dynamics. versus like to going quarter lower continue flat be a or growth $X.X million quarter. sounds leaning this the came out flattening next is backdrop even this new accounts or against billion. sequentially account your spending growth average quarter card hit

anything something growth causing here? that's drive with question is, little you with to going you bit anything I there is Delta? So Or are attrition or on account a slower guess seeing my

No.

off it I $X.X to down on quarters that's the happens committed billion no, But of just it we're And is think and overall what approximately happen to days way to timing. marketing. cut the is. becomes particular

a saw sequential You slight drop.

million of we raise look the marketing account tremendous But cards out time a X signaled. here, well. for growth I as as while. And there, perspective. is see from why said went in which our think signaled the for opportunities first we're to sort than We year acquired we next more still overall expense we under at revenue we an going

opportunities those as acquire there. all cards anything seeing not we're out that as And continue are no, to us we So pause. at will those gives long

So quarter. in a you will the level higher next marketing see of spending

Research. is coming Bill from The Carcache next Wolfe of question

you Christophe, customer the over the call. and CFPB view open a to forces to recently There's share the relationships. welcome proposed? banking Steve thoughts that on keys banks banking that the open initial rule their any hand to Can essentially

for So if on view could then you you great. to opportunities expense as may that your that app thoughts there's up risk a was just be Christophe, speak revenue. rewards present reduce you your a treated counter following I Any any hoping on the commentary, would Amex? capital that could And

said now, just to U.K., as And let's for or on Yes. Look, think years business no go had negatively. open our or the so. I far really either banking positively U.K. XX impact as had it's

a so security more lots many product which has of than dispute see benefits really membership commodity product what think big take fraud what actually to paying. I an So a from Bill, I as has we're perspective, product, a product like either our I'd than offering this or you would perspective, a back, opportunity. And perspective have. banking don't threat a And model basically, offering. big a other open is different components We're to just

in other And as the so our over Christophe. I an don't or opportunity short either question or term to really in either will turn term. I as the threat see business, the this long to a

is regulators. really the Basel, through it element important thing. various think be on that would Bill, discussing I changing you exact list is the an the call. But which don't still useful right? raised same things our business, morning are we're So to this with doing on here either nothing there here, in go We're that

we regulators what or that. not with dependent anything accounting like be figure upon level and capital here right And of out to treatment the need so

we'll this too when in you early more ton of provide to we have detail. clarity, detail III So discuss a Basel with

The next question coming is Gabriele Dominick of Oppenheimer. from

curious of down recently your as just billed was rewards the Member curious quarter-over-quarter on percentage year-over-year. just I business. It utilization in or quite nicely commentary of that? any anything and you're was seeing particular a I around rewards stepped on Card if

quarter So lower yes, our at -- was XX%. total and called VCE, the this that I

you It's is the large number and engagement base. a So variable Member Card expense know, as rewards very biggest there.

this. And redeem choose looking the value we always sure to make when Members changes for constantly another. there's proposition ways launch well we're of Card we how in one points to price and that we're looking products their product at we when best, quarter at as do refreshes this to from works terms So

in we're the that know, redemption mix partners you new As changed also average cost adding per constantly their weighted terms of point.

So that ratio. variables this, impact at that any point lot in of a time, will

the very will proposition marketplace. right right in the We also we on versus making And focused are ratio the we that value be have that revenue. have compelling sure

bit it's lower little a quarter. So this

for one That's the sure It's and that XX% be I are right Member of with cards well And said key we're of bit standpoint. drives a full a an reasons we full keep sign have it's area that a for value think of the seeing we well. and going investment as from working up for the on it. those year make growth why because better Card us. propositions to It going balance as here. engage lot year I the we still to

add The only other of Card because want card to within within premium lots with propositions point reach base, I'll of lots our benefits to our that Members. and include and propositions, really our our us value partners value work is

is works look mechanisms you at the of all value overall and it's there base. out. And that different proposition, not are funding It a so just from rewards perspective partner-based when how

proposition parcel So value well. as and part that's of our

Cyganovich Arren is from from Citi. The coming next question

bit and are seasoning touch at the how net a to below little thoughts maybe to very continue curves on pre-pandemic vintages? relative happening charge-offs into your are your heading on You you peers levels. on outperform XXXX? for recent much credit least your could What And

yes. Yes,

credit of a and That's the attracts details point I is plan do that tell guidance. that it the can this So performance us decisions credit organization. -- what quality we're year all talented beginning speak premium lot a you not the Card in our next the Members. about call. the have of to for our is XXXX XXXX that going products the We fact at and We on you of about to risk give very when we of starting starting right? point, But

execution disciplined that's portfolio. the as that's the And very what the peers, of of a of differentiator know, you starts even with risk on this this premiumness on. And we said But key quality many the anything, decisions. product. on and if times call, we our it vis-a-vis more focused have we've the We our focused are

the a -- you're Card Members on That's big in product. are bringing are Members to those a the fee-paying join consumer Card new franchise franchise. the We Members, talking we're XX% new the vintages, Card about of joining statement because

that's credit start further. we either out. still competitors, so little a before, bit increasing But normalization on. to projecting COVID, And pleased gap what we still, that of the And our [indiscernible] and as are versus we're seeing. going are you said very There there's with use anything, as performance if is pointed I've out,

The next from FT of Partners. question coming Craig is Maurer

was and I was congrats And while QX saw on up Card this the Member And prior interest Kerri substantial are quarter, we're in -- net points pretty a now rates The roles. quarter-on-quarter, versus Kartik above your nice improvement I quarter. what XX carrying and the understand so on new quarter, increase 'XX. yield loans doing, basis

your for accounting trend? the that we the considering a how quarters quarters wondering was to treatment that trend I expect it's row. to of in we fees, should And secondly, coming several given should So expect due how over visibility to card decelerated

Yes, yes.

increase parts, thing terms of various driving the the the funding, the yield is here, revolve the They vintages. their that you But on are, in biggest know, So right? element of there the as in key terms key, small terms pricing, in is the rate. that many yield, in of are moving

I from a total want tenured revolving we again that their something Members i.e., balances, that's we of well, outcome tenured can is our an coming little to bit. coming for interest-bearing from which loan our And most Card And is the well. that So of rebuilding balances, balances out just growth, now. of XX% called share point most -- underwrite know that in that Members, the Card growth out quarters the balance we've several increasing and -- is is

good you're visibility key the behind that's it have we yield card XX over amortize right, we driver fees, those because improvement. When So fees comes the to months.

So see that we trend.

trend expect i.e., a that So growth bit, you the continue to to should rate moderate. little

just key dollars, I going out. be to that on refreshes. function it's of this also a more be us to cycle play investing As is bringing said, marketing Members. is going to the product of a to fee-paying And it's going driver Card And more dynamic

a moderation as specific a still even a expect a few moderation And the So call, quarters, level. pandemic, used of you bit we I very should growing. there. during But say call need out in to was to it's category from that this next the that high on

So strongly it's still in grow going double to digits.

pandemic, Right. growing we XX% in to And XX%. if you back go the the were to

had acquired outsized rates QX at that the in let's And really XXXX, in so and when in look QX you cards call you growth it, outsized, had XXXX. not of the we

you when fourth lower. was XXXX, it the in of amortization to so third got And that and quarter

a happy growth pretty numbers bigger. was rate we're rate continue in So with get little to that look, the higher growth XX% But bit over as we there. got

Bank Our Mihir of Bhatia final question from will of come America.

Christophe, the to switch talking that about maybe congratulations been Kerri from the just whole talking about card about bit and call to a wanted has products. little I talk maybe And products little bit. And Kartik. the a Yes. non-card

et much that contributing yields both are other Maybe time that lot the that, is an expect you've $XX side. think over now How seeing Where a of some do up trend? How bit on obviously to commercial where and in total talk receivables consumer is loans interest you you a cetera. and growth? billion I in. just been It's area to about now. strongest and spent the little investing of

Yes.

it's at billion, So let from hit me just and do piece. relatively even we're still a strategic perspective sort of to $XX what small trying of a

part forth. And Kabbage to overall it case, for be along loans the sure be we acquisition non-card what to for we checking can sort working that to wanted that of a with to years be to able variety It needs term we do can did X think it is provide because customers. try to is did what with our as shorter and well that do, for wanted goes I can small make account business sure up do that we product, and a capital. we to of is loans. a that provide loan services account, a we lending so capital small from our having of things capital And having working the charge working host products check could a and of of to and then businesses having a small we perspective having One in to business transaction product that from make

loans. and the history, then And a it organic lending in for product try go in to fits up put And that perspective, growth charge we savings also within account pay a back of we've consumer so with started our we and it consumers. I and put small with a what think that and a came the of continued as and card in. that overtime to footprint debit personal is do grow really to segment. From and driver plan us not our a component that's really But product can then you

to been sure products about are our it's we've judicious think our services competitors important and need that customers that. to going But to how about I when like they not make that. an gone so add we've and And careful

So have that's strategic sort that. the sort on of of backdrop why we

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