AXP - Earnings call transcript Q1 2018 | American Express Company

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the American Express Q1 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, this conference is being recorded. Thank you. to Relations conference Willard. at like Head to now Investor of American would turn over the the I Express, Toby go ahead, Please sir.

Toby Willard

to Chief with slides for related which that, may President as release for you set are earnings with well to Once on discussion. the forth today’s let me Company’s through materially And Exchange information the as and to Financial XXXX could will on from review Information statements future We differ posted Vice you begin performance are the the discussed materials GAAP Company’s contains to file earnings ir.americanexpress.com. be and key forward-looking contains and Welcome. relating with his will who slides risks Jeff all which on financial Jeff. expectations forward-looking remarks, Commission. also comparable over website points today’s completes are in cause the that and Jeff prospects, first us subject with measures. our and based financial the certain the David. and We Executive within quarter Today’s in today’s conjunction non-GAAP today that these presentation and series discussion of some a financial to at to current Campbell, session. call. Q&A actual measures certain to uncertainties. about Thanks, review results statements found Factors business encourage results The that quarter’s slides. the The management’s may appreciate reports joining of discussion Securities Officer, periods are be the all presentation we’ll discussion move presentation in prior discussion of turn

Jeffrey Campbell

everyone. to XXXX. afternoon, published to results we quarter and solid good our and a year are we Earlier up today, first Toby, start thanks, Well the

across was share earnings on strengths Investor in the our XX% through $X.XX. March, continue focus drive first our and off. When our Day quarter to you these areas Our we results, see our you investments build per and revenue to opportunities in was focus growth our invest paying to adjusted took capture four business. look you At at to and FX and first our plans across key quarter our growth

the We are leadership segment, expanding globally. our consumer strong in showing growth premium

on position with our building SMEs commercial are particularly globe. We across payments, in the

capabilities revenue it with segments And digital digital Our are integrate growth and powering accelerating on customers. efforts recently digital all our steady together, our many across as bringing is network engagement progress geographies. we customer acquired make our and

with this context, on So the X. to let turn Slide performance financial me

adjustments related I’d many year-ago. XX% that our provision. Tax a and corporate billion see we the loans, year. prior revenues year. quarter some from grew fee $X.X reflect growth reflected tax the to billion, share Earnings U.S. solid quarter, was which XX% $X.XX was the you throughout adjusted up tax the per of in companies, expect First for new the modest remind resulted XX% significant And across our results a income. FX rate, and $X.X reduction in like first to quarter income Act Net up billings, for from U.S.

have quarters. share EPS of last prior despite XXXX, over for the the suspension from $X.X our first done reduction if been still effective XXXX tax simply we're would of rate growth outstanding, shares have share the QX adjusted from you a half double back repurchases tax the also out I'd that our digits. step the take from year, in apply just four lower in However, a the our impact in to EPS benefited point and also X% repurchases stemming we to the billion

I'll XX% performance, total, with an sequentially our of to the you start Billed accelerated FX X. on worldwide through business, at In growth several details which on Slides business Billed behind views adjusted X see Looking basis.

X% all As specific you growth X, of growth growth was see SME segments. on on can sequentially growth our see our as be last also across continues serves second volumes growth our up billings helpful a reminder international Slide customer segment on X% spending our solid a and from more To This consecutive Slide up a X, and get on XX% you by customer earnings in global QX. the view for quarter's of global and billings T&E see to our was of network basis. basis mid-sized slide U.S. an note, global the that U.S. The small airline X%, our segment. the adjusted QX rate of to to compared highest for quarter a customers were an adjusted or large to same SMEs quarter. enterprise and the consumer Company global FX continue XX% compared up the billings. represent On commercial respectively, of XX% some segments FX was sequentially Starting comprising both are overall remaining this makes while size roughly up can you XX%, global and last related to services XX% billings that on opportunities. billings SME quarter left, and tables

growth continued payments. BXB in also We saw

X% Company's XX% Moving to XX% makes U.S. the quarter. of up from billings, Consumer, the prior was in growth up which

the Consumer not basis This of quarter contributed first we the XX quarter. which portfolio completed around the growth already in U.S. that did to own, Hilton the acquisition points billings we portion of

beginning you broadly, we proposition will but we I next also We remind made the changes in growth quarter, both confidence More quarter. in with strong base to continue increase value saw Platinum the by XXXX our the see we fully lap premium spend the within continued U.S. customer focus and engagement existing our U.S. this around customer customers on in reflecting in that our in franchise, acceleration our globe. an and consumer spending would and

an up XX% adjusted proprietary in QX. is which XX% FX you to an compared at moving to on the uptick see fact, international sequential basis In do consumer also growth right, in

XX%, We on Global continue place key one Japan the in services to UK proprietary an were billings up FX an QX. Australia as XX%, QX network on as, is basis. X% all the up up growth growth basis such adjusted and FX X% where rates versus sequentially they XX% have robust in up declined markets, adjusted in

geographies. As we of diverse in growth business our two some feel expect we regulation we these experienced Europe across the volume to GNS have and double-digit of business our impact Australia growth. to said markets, all sources business. for continue Outside time, the and this Overall, about good in segments

Slide X. Turning next on to loan performance

XX% growth loan accelerated in total QX. Our

point total remaining the sequential as basis portfolio contributor growth would quarter. I to the contributed to again, our acceleration. a acquisition of acquisition XXX this points loan Here This about Hilton the to

the slide, the right side yield hand points net was interest On XX XX.X%, of up sequentially. basis

compared see yield year first basis in know, the quarter a to typically was seasonal As you yield XX up the increase in we prior points.

As we've interest net been been to stabilize sequentially time, saying which growing expect yield, somewhat. some we steadily for has

result, levels we expect the year-over-year in as year. a from to through As growth the current progress income net we interest slow

credit, been questions than area. we take expense and some more to want to interest about getting turn I costs we detail to in have minutes before funding this in few our a do Now I usually talk as

mix You charge includes our are all that are interest-bearing. card we sensitive not receivables know liability given asset that that

unsecured in active be and to is strategy debt. backed securities, three markets; funding asset deposits, Our

personal our billion coming in online with accounts to coming The $XX our in which about is from sweep have In rising market of environment, remaining rates. line least is billion from and generally about We deposits tend a funding. deposits of rate source savings $XX move this CDs, with billion expensive $XX program.

We to our next two grow by U.S. banks. few savings our expect recent facilitated consolidation the the to online program over continue steadily of years

rate pressure When our is rate interest in on the mid-XXXX, Fed spread we the compression that planning. prime, with some anticipated look closer but Of has in back rates late, originally than are seen net and sensitivity, own up. for which been of rates at our terms about since is yields to other In roughly X.X our recently we internal have floating using X.X our planning. debt, more raising putting trending started line beta we in X.XX, the you our between in beta funding had our

remind mitigated would that over in in a have stronger basis income I represents part $XX following a the back, about usually of impact a you the would headwind change environment rate net between our just remind interest XX XX-K point spread I the you prime rising million sensitivity LIBOR our by months. that will us for in on a environment. Here, XX economic communicated one-month modest and Stepping generally a

go the modest, through the about steady Fed As for but challenge the as year. growing we XXXX, by represents balance I rate the of latest think the consensus hikes

the let’s in X. the left was you a move basis from last about see credit portfolio, year, on X.X%, points to sequential quarter know XX on on the a with quarter. seasonal you is lending which the increase perspective, loss usually from the Slide So first up as metrics, and rate for there Starting

the we an towards increase products in We have over shift seasoning been expect due write-off primarily rates time some portfolio and for mix loans. to saying time non-cobrand our that of lending of the

rates ratio. as On well the charge global can loss right in side, corporate loss our payments see you as the portfolio

rate was charge loss Our X.X%. on

one short environment useful duration these look often macroeconomic performance we Now of the charge as assets. at our indicator, given the

quarter-to-quarter due from seasonality, the charge fact premium is positive down to as year-ago, on our of reflection write-off there in base. a tenured which a the While movement status see from we is rate a customer broader

and reserves of and moving million in Given credit quarter. metrics Slide these built first X, was $XXX we provision $XXX million to the

full-year economic at We remain acceleration remains in reflects expect and range, The lending increase provision where activities within borrowing our more loan provision be all were which capturing focused in customers were growth which in the that have mid-XX% expectations. our on and appropriate said we for outlook on for provision this attractive We exactly metrics, is credit believe the the terms we our year. of growth quarter to the of growth the that XX%. XXXX

from we the So may growth some in have rate variability quarter-to-quarter.

FX revenues X. new was would the under Slide are the revenue is that in adjusted I we which reporting in standard. recognition Turning this the growth revenue you on first first now quarter. remind XX% to quarter

or earnings. a our QX Day, have at impacted are minutes. change we spend a minimal most drives that said the revenue new in To in all historical they today to be so on growth of by to changes areas Investor the been rates we time few basis geography that I’ll little us numbers P&L numbers. are clear, with discussing recast, a on XXXX As our comparable change standard the for

across XX many point benefiting of revenue. we the components Slide Moving all across from these would performance see numbers are of revenue our I FX in solid that for to drivers, lines. reported we out

XX%. were income small up up growth to yield reported Our growth this the the few we and was to just of minute. higher fees Delta was ago. well lapped XXX rate sale Net total points Other revenue come driven card fees a in that loans the business net growth revenue have markets XX%. interest and moments in was in FX XX% as XX% up X%, I than now a growth QX, and commissions mentioned which was U.S. adjusted of a as revenue as Platinum basis returning back growth was XX%, quarter international up Others key the by X%, positive Discount And by driven XXXX. I'll in

from trends, focused been down revenue around I source. Now to recognition our that the more knowing new have Slide that this noting you by on wanted standard XX, is revenue as to contra-discount on bit moves our color I’ll provide revenue largest many start them discount revenue items a expenses. certain of

the X.XX%, does was While in the from of themes. we several rate down right basis this it not left, shared impacts materially absolute the levels with expectations on page, points trends X the change Investor Starting Day. of a the year-ago, or our numbers discount that on line in QX at

partners led benefits focused drive volume recall us discount to The to growth growth accelerated of on the economics. revenue revenue on Investor our of to discount and reaching And higher growth as expanding our momentum. discount of have business the not growth that are in are of with decisions XX that the portions strategic adjusted selectively QX. trade discount discussion, to overall rate the fee driving important been see drive right points adjusted in of and adjust has relationships Slide FX which on three selectively may in this order revenue XX model. offs. declined quarters, Day X% side from came revenue believe of broadly, such to the results adjust deepening volumes maximizing key has rate FX rate discount X and are In rate, As to achieving discount more strong growth merchant We where our with we even from by spend revenue see the QX you has we strategy particularly such the pleased roughly last illustrated our you coverage

If the and driven QX our fee of was total context the model. you of card think revenue our this the XX% in spending business about in centric income spend in fee nature of by illustrating P&L,

I’ll Turning Engagement, the and components Marketing Development, the cover Card now Customer Member slide. to and Services Card on XX. Member of expenses on Slide next Business Rewards

last instruments. the we approximately in X% we Most the offset as we Operating quarter. importantly, expenses partially for our X% the transaction quarter on Now be accounting growth an consistent implementation prepaid a with full-year our These let expenses that recharges of a discrete our drive expecting items, expect to first and financial stemming contained basis, guidance expense historical new adjusted up valuation number but a reported The to portfolio, FX our operating involving that discussed were first. operating operating up ventures basis in leverage. gains only by of on operations from loss such the investment on ability me were year. Amex were on cover expenses

XX% billion from that So the year. it can now quarter, you up Customer Engagement a turn prior where is to $X.X on the see Slide first let's XX in

I you that have we revenue the the Development standard. line. these impacts numbers talk there Business from new several and to the I’d at Marketing recognition As components, you remind are new through Starting bottom, the

covered it As has Day, we Investor two components. at

is traditional primarily banks, make then payments partner Our and X% corporate year. partners, clients, This to prior partners. marketing total versus GNS line cobrand promotion the up certain expenses we and and in

traditional a great bit; as to compared continue acquired acquisition the we at year-over-year however down quarter during efficiencies X.X Our Even a million XXXX. make the this marketing bit highlighted quarter we is new with first million as steady actually underwriting to Day. of down Investor spend we cards in progress X.X

quarter’s portfolio spending. includes still this number card from obviously Hilton Hilton, coming growth even lower marketing Now But cards we the recent acquisition. double-digit saw year-over-year excluding acquisition the despite

our partner to business in related So is in growth driven as overall business. development recent well the and agreements cobrand increase the our corporate as line primarily marketing by payments, investments in

Moving up to Rewards.

as rewards with I said billings. As to at expected you Investor Day, which slightly during growth up billings prior are grow line QX XX% roughly our the than the XX% in expense just higher was proprietary saw rewards from in year

reward. all revenue includes our As recognition a those result as a our changes, line costs rewards of reminder, now for cashback rewards including

cobrand. Slide, airport then such our engagement free Card Moving as the by of services, XX% to the were Member on and costs top Delta bag services first our lounge up premium driven access with

Day, basis, I and be our Investor expense difficult differentiated find replicate. growing card services given our line others percentage the fastest on continue on said for to expect to providing As a would in customers I focus member services to

Looking year, balance forward do QX for business spend I the primarily low the for see and as to point the two development marketing reasons. of

of result we as for XXXX talked as earnings we million increased the Tax the full-year call in of $XXX the a on QX for First, by Act. our investments January, about impact

that quarters decision, chose the the we spending of Given to the late year. of timing all latter allocate of to that three

launched brand I that all you now this campaign a that we hope seen global by new of have Second, have month.

you on the and a media would spend in did than But about balance prospects brand QX. we the result year as expect, the of campaign. more will as excited of significantly in are we We long-term this

on Turning last to capital Slide XX.

related As call Act, on XXXX. the the repurchases we charge for the announced given half share we billion our QX January $X.X earnings in Tax of first we took suspended to

X.X% ratio quarter. increased the at We has are Tier X equity our rebuilding capital to end of the common and first

our Looking submission. made XXXX forward, have CCAR now we

business to time, target ratio Over Our with XX% Tier restore growth. to distribute to aim to XX%. steady equity capital plan ask is consistent state of we X while to a shareholders levels supporting CCAR common capital our back move and our to

Fed hear our the on submission will in back We CCAR from June.

repurchases to confident well will growth share expect the that about resume organic half capital our to capital I feel know deploying to in the Based in of we excess our continue asset by support those good We what would that second feel generate needs. business I today, and ability year. of saying we conclude on

will outlook brings that and So questions. your take to then I our us

full-year that have revenue read at growth release we expect least our You press now now by in of X%.

performance quarter, into be expect now EPS a full-year high context, the we first put our me few let this To of Given range guidance comments. $X.XX EPS our in $X.XX. at of solid to make the to end

First, we it are only is XX year, days into the still early.

well forward see face said moving increases rising we've of the and the year-over-year steadily as environment. our refreshes in before, interest a Platinum of the rate side Second, net revenue over headwind moderation lapse the of on U.S. impact modest time we a likely yield

On side, through a will as few for expense go higher minutes went reasons business spend I the the ago. we you development see through in year the just marketing

for long-term will that to our So believe while as they commitments growth our the year the Company short we allow good feel shareholders. always about and and goals balance us to meeting plans of the

during few a as last IR of solid role Head Company The we on our time first as differentiated number and Global for Edmund Relations I'd CFO key three new I’m finance challenging to a calm on Services point, Investor team me positions our every you over have growth. role and amount for new have like CFO that Lending Investor us welcome an Investor to Toby that, tremendous I'd sure With knows good about most that and day for and value. U.S. EPS we and of take a picked all making the see Company. our and with a brings Willard and them of to Relations, leading Amex model particularly a Network had revenue final win our was Toby let at wisdom Edmund, insights, Relations. One to in to his steady to here and enjoy advice after and positions and new nine momentum Merchant years I the Edmund quarter leading know as have Company. last recently years with passion with pivotal delivering that faced the it thank of results. sure has We our is like are we impressive has focused succeed. years will working business the the Business. Express, to towards time. have come of one Global also you. Consumer we American to Toby given a I turn show built steady consistent moving relates a Consumer also of He within his has time Reese, Business will our that which function been a and all the Toby business back Edmund

Toby Willard

kind Thanks, words. Jeff for and thanks those

I'll question. it up lines everybody please Before to over And the queue you to we I’ll back limit David. just in one Q&A, turn that, yourself the for open with ask to

You can for open up Q&A. the lines

Operator

the comes Sakhrani first line of question Sanjay Our from of you. ahead. Please [Operator go KBW. Thank Instructions]

Sanjay Sakhrani

leverage you maybe more renewal cost on Edmund. saw type Toby, Is can you competitive seems of going you. benign that sentiments? fair you think improved welcome then result the higher to that forward a just function environment of you impacts just and of slightly we it Thank T&E. saw as Card money And a tax like the the statement? a relative maybe T&E think you quarter acquisition in of spending, Is it's as Member get and reform cobrand that reinvesting a because mentioned and businesses the or this congrats the past. do And airline Jeff,

Jeffrey Campbell

Sanjay. order in those take me Let

is constantly the acquisition every that last really Card biggest themes new of by the particular the side, more largest and important really aspect that terrific what efforts. is allowing Doug in promotional our focus time really couple Members, of marketing the into quarter, most to terms still getting while of spend our us every results of I and Investor sustainable the Card most new on driving acquisition year moderate a acquiring in really getting and efficiency environment, would areas. have spend of on over and any as change to and a believe in relentless long particularly thing the have to efforts are Day that you in particular terms Buckminster better On digital And that in look we as years Member improvement those I run, broader at acquisition point know is lot opposed continued we competitive we our to

consumer. T&E certainly U.S. we of spend organic spending of many you the it We growth, areas On and in We the volumes customers. see in as in so what subject consumers spending. you existing saw outside amongst airline the spend, U.S. it saw T&E internally call sequentially our the would growth well at we as that tick-up the when in look a saw rate

type on customer The of to or what's reluctant, Sanjay, for base. going it’s on our anecdotes can thing discussions of minds confidence. premium consumers to all is, harder clients. oriented for So increased that’s driving going difficult comment us. us more go I'm with clearly We only on amongst there's corporate individual individual in from their something on It's this lots further

the with premium not spending. representative, something necessarily is is but of you on tell when oriented. is you now, indicators see Member increased and in our consider in is numbers the look What we a economic though you consumer or Card There broader point more when confidence. it’s growth right see broadly to commercial going nature confidence hard I know, our increased it's base As clearly economic you big inflection what external at will and

Sanjay Sakhrani

you. Thank

Jeffrey Campbell

Sanjay. Thanks

Operator

ahead, with from the Wasserstrom line Please go of comes question Eric UBS. sir. next The

Jeffrey Campbell

Eric. Hi,

Eric Wasserstrom

thanks appreciate Toby years. much the the Hi. for really all help very it. I over And

Toby Willard

Great.

Eric Wasserstrom

thanks of terms mind side Jeff, in maybe going asset in in was or this the specifically much period maybe doing quarter? much funds, very would cost more maybe yields but an just explanation on intra attributable you for through side for of terms the of of how back on the increase was deposit occurring to what and what occurring the change the was attribution

Jeffrey Campbell

Well not and question. take we’ll in had if what at XX% on start if you a maybe are low. trying let interest top, though Toby’s at simplistically we I’m me answering stab, after even we’re growth this to and follow let follow-up, you exactly stay XX% growth income about one think Most rule you on the net of

happening a So what's you've basis points. obviously quarter the of interest When neutral. fairly increase rising on interest net from lift yield yield that at was year-over-year XX to rates XX net of X% basis added net look points yield, up in close was you the got there us, for impact

continued that various thoughtfully about year of and coming now more point actions really as been this rates, mix, in rates basis fewer people are pricing for have full for well risk paying in is so evolving XX over as us thoughtfully from the the introductory more who price rates, for as as price increase competitively. quarter on more the talking a we effect we we So people we've

after? neutral. drove XX Is is that the in helpful effect that and So was that's really of pretty this what basis interest you're quarter what and points the particular rates

Eric Wasserstrom

one of And Yes. that. I can just clarify component just helpful. if That's very

course which terms as of year-over-year risk to in think this take we a understand your beginning a there issue guidance you’ve compression yield the some deposit about is rates the this higher Do of So improvement – about around I underscored effect net the to year-over-year? beta, be XXXX presumably starting or net-net and dynamics over of quarter. of

Jeffrey Campbell

be let I clear on Well what said. me

us. rate fact So headwind been modest a consensuses recently for, become where interest the current given rates to is betas for have in raises as the if component most certainly call Fed would likely pure the

of the pricing with well mix. So be the that will then impact thoughtful we leaves actions, as about to you evolving continue as

the increase to moderate. Now XX to I expect year-over-year clearly point basis begin

manage is the as job we a moderation as do small Company everything possible is Our Eric the as we're that do seeking can in to and what the team. that’s to to way

see making to just are the very versus have we successful moderation we'll large. So how small

Toby Willard

we'll operator, the maybe Thank go next Eric. to question. So you,

Operator

go from ahead. comes the question Mark DeVries Please next of line Barclays. Our with

Jeffrey Campbell

Mark. Hey,

Mark DeVries

Hey, thanks.

want my with in the has there I to through we just couple question pace to a was think the to should moderation growth the things – So do see business that deconstruct. of –

continue I times, the that's be – But ramping Platinum. you've to certain right a effect? lapping to for providing a gradual of you've engagement, alluded the potentially also and not the that's several going you delay fee that of think And Jeff, and Are the you response going increased seeing alluded the be tailwind customers. in assuming then bit probably I'm kind some that had you to in lapping accelerate to to a change organic of question, of growth. also to Sanjay’s thing, imposition to obviously because had

Jeffrey Campbell

good So questions, Mark.

year. the changes that in made side, Platinum, just on off, First in proposition consumer being March of last we're all look by I'm factual on we value

So The the changes them. completely made will we where business you to begun next be quarter lap first Platinum on quarter lap. already side the we've

a price we've for put where our in So the more tremendous and that card and side, into you value Platinum portfolio saw look consumer us on value. lot the had performance

tell the renew attrition now rates at they and We the as fee will all. the have you six applying I people card to over months are moved new into not well

value really proposition. So good we about feel and feel good I think our really customers the

answer to but the can proposition lap make see growth changes, possible, quarter. as I ways I'm as value as We’ll next some we going the to get all moderation. rates there have doing you that would as changes just certainly will gave expect we moderation certainly just we fully try moderation some to is Eric. like be in fully lap as modest it into to great in little we Now a you everything bit We're some give an how

Mark I quarter. this There things little customer just the that have – many results, spend to back doing. other our point credit point something that an only one my seeing us clear that inflection I you than it you while thing anything at we've seem thing I increase And year. I’d greater was we growth have for probably probably effort. If I would look steady The this increase with continuous been surprised now for at that little that bit across to been driven XX this think to to on clearly there's been like being guess here our we're think quarter's into there this I pretty the going it would as point steadily flag quarters well it's organic little number almost in is quarter be be a base by due of a bit a take days

XX is into sustain the just to that, days it little going itself, I'm see. year, driving So about have what's cautious exactly a to we’ll

couple in see sit of the April we quarters. minds as uncertainties the those and volumes here might in the about I probably I say coming XX biggest and billings So our that are on would two think trends

Operator

with Our Autonomous. line next Maurer question of ahead. the Please comes from Craig go

Jeffrey Campbell

Hey, Craig.

Craig Maurer

let add me and evening Toby. congratulations my for good Hey,

a would few you something hold growth now Just should environment, the long-term does we about be line or a serves OpEx revenue – memory be revenue the thinking question, steady correctly, ago thinking on your that growth just less. so you change, talked in could to X% helpful? forward Thanks. felt growth that Is on OpEx long-term if OpEx right you with higher; state about at still X% years

Jeffrey Campbell

few Well, Craig comments. make I’ll a

earnings consistent per number revenue that. share First of and driving is focus off, and we lots growth levers achieve to one have steady and our

focus addition and in our say And would to the at strength the I of have also CAGR point other in as to on that build many a tremendous our you talk has fact model. Steve given you've volumes X% track XX-year we And were the believer scale look our know particular steadily thing record you our and been power will about is a of getting of last forums the always economies of operating if grow at years, ability at integrated X% rates. a seen we Squeri or business growing when his model expense integrated XX I'd areas Second tremendous to the of leverage out you that in nature side. many operating expenses

like So number ability into will we to is expense in operating because there little bit given to to many the capabilities, it digital will things very a more things down the will operating sense businesses exact cause sales many, of better money pull I'm us are we run that All our like our things times many year our are expenses forces in allow precise any the those to about be steady when At being that put frankly going increase confident to get real things result. and marketing into in resist like expenses globe. times us get make leverage. across and a

number exact should about expect be giving see you cautious But to operating leverage. us any Craig. get to circumstances, an to So under you expense steady continue I'm going

Craig Maurer

Thanks, Jeff.

Jeffrey Campbell

Craig. Thanks

Operator

of ahead. Wells Fandetti question Fargo. go with Please comes the next from Our Don line

Jeffrey Campbell

Don. Hey,

Donald Fandetti

there was you've SME sort I And a some Investor and versus consumer? the consumer if saw consumer? you seeing I some delinquencies growing areas How possibly of compare the secondarily think benefit? credit, Day, U.S. you quarter Jeff. any commentary international the was curious about forecasting of this those Yes, do then been benefit contrast at on tax rescue reform? an from

Jeffrey Campbell

your color little more sorry, I'll and a Don, after both? just just question can them then and me you're give second hit what you on

Donald Fandetti

Sure.

growing variability, sort lending do pretty forecasting credit sort rapidly side, curves well? how of been also think SME they you and your those on as U.S. line areas loss and as think and projected of tracking been small growing the about in with international business about So you consumer you've versus has consumer the are

Jeffrey Campbell

Good.

are It’s me speculate us that consumers consumer let you speculate U.S., the think, clear facts in saw start uptick particular with careless, little can what and the So drives the by spending behavior. reform. a a in I we always sequential economic Don, a to Certainly for tell confidence expectations, would greater tax we the something our have on on percentage that exactly When at about Tax provision came while you like to I whether relative or provision, that's do look the Act. year-over-year. to or expected the basis growth I in with on would

delinquencies, netted we’ve line fact volumes probably were in higher and the what expected. rates – lending little were give bit provision with rate a we tiny our bit they than a the expected was In the you better in a out right to that

between a any Act the are draw direct specifics. little those of to those facts. to I'd reluctant the So Tax and lines be try guess I

getting feel portfolios. business lending, grow our our well in lending portion U.S. Now both only there small is lending same the in consumer the would to we exact mid-size U.S. course We're all the are and in portfolio lending. SME you different have still I’d you things corporate on mean I that also international characteristics. lending nice consumer of we still markets, make our enterprise we remind that is correct. the done is insights is very side. point multiple predominant mostly do as out predominately that handle But The everyone really and consumer the the which consumer to which international as have I in say of on

attractive, higher by are but we there for that really some that in much higher produce economics. are that operate So and extremely rates nature good yields write-off markets and have compensate generally

where forecast on we very the international average of you And say so look different the handle and going. have very When risks aggregate feel at market, within in given a I a any will obviously number, lot things. the we of that good of we're

it. tougher generalize little a about it's So to

landscape. would you the way probably through that's So the take I

Donald Fandetti

Thanks Jeff.

Jeffrey Campbell

Thanks Don.

Operator

of go line the Shane JPMorgan. from comes Rick Please ahead. with Question

Richard Shane

really Toby, been the guys Thanks it's taking a years. my pleasure for over And questions.

very So much. thank you

Toby Willard

Rick. Thanks,

Richard Shane

Jeff, of ask little of strategic – I’d love question. a a to bit sort

that reduction to is of is competitive some excess the view Our lag. in likely landscape or returns those the completed change tax going to rates probably the

and side, is rewards adversely when seen on How the the that which you of do again? reward historically raise evolving picks it at really this that One up see we've frankly affected places Express. is year raise American the really more rewards next least the if recently will over heated up, I think

Jeffrey Campbell

few Well, I'd guess a say things. Rick, I

share are our We driving shareholders. earnings steady growth and for revenue per focused on

a We’re out and lot Members, marketplace focused our for the of think today. value in have Card propositions tremendous on tremendous providing value propositions we we

really what anything As here good today, to to feel I fabulous our is value said about the I else in about propositions. out feel dramatic there. I do feel We don't need response segment I you on and quarter, to you conclude when and rates made propositions. think we've progress this have every have in growth the at our we customer value geographic look great Platinum that

say all with And try reward you the people I'd brand, an us allow ways also to a that to we and really our our partners match. Member difficult focused believe the that, have our model, but Card years the unique are of that have. for of size aside, things the part a see we do. sometimes leverage lounge things couple as global line to on the propositions that comparisons it's of We difficult closely of value quantify to is Rick many the program do growth assets services last evolving to those like And things variety our customer we for in do global people premium base, in differentiated others in often our scale,

great should is how of just are but Tax are Members evolves, results to Obviously produce to do have I where feel anything implying change environment see things. we two see provide we we do returns today don't good we Act about for propositions and job about about feel our that the So Card to we'll the the those Frankly, to steady we strategies to posted. value shareholders. good either

Operator

go Please line Moshe Orenbuch comes next the of from The question with ahead. Credit Suisse.

Moshe Orenbuch

some guess the you of – last talk that way saw think with ignite that competitive Toby about whether and how I on year? yourselves of and new head just Starwood’s up following point, on over programs, kind going kind certainly looked something grab about kind the months in the trend a both points we going XXX,XXX maybe some I a is to out maybe with to Edmund. have is you from the portfolio back guess info Chase both condolences start over few specific in days and to the Congrats and headlines. of thanks. it that the might of Can and course a next Chase mean it's that of and from for Great, dynamics that couple context which I some Marriott that

Jeffrey Campbell

Moshe. couple say I’d things

acceptance company relationship is broad things. another. too great lot multifaceted value us. the long-term about the for we we we way relationships, very about in Marriott, it much which believe Members. lot a MR, and First, or one of produces offers run broad a value of relationship feel our believe Marriott the do months for We cuts to great some across marketplace worry our travel We’ve in cobrands, it grand the value Card couple We with for a merchant don't scheme a produces business, things our our relationship with of

our of when we broadly bring very every do believe cobrand than to speaking; our you And far Member set the look by that with strong. really do is in have to offer all value assets brand, propositions any all say I’d multiple thing largest a you that global we thoughtfully Next tremendously of has products we And unique Card issue because value in we marketplace same have tiers a value more different that's some that’s so at propositions people meaning our little the us proprietary of assets think because on want they different scale, whether look charge you our partnerships credit at proprietary set on look and products, can our why of whether things at differentiated offering want things. to those different the different many you products, that of on of products, why bear, we our to our we not meaning make meaning our competitors. see ability particular

the a particular lot made just in raising thought about with you some people ago, Members the members despite spending card. most two offers paid years by of the Card fees those that ever certainly number So we the for the year mentioned if card finished XXXX highest noise we had of with lot were Platinum competitor extreme with marketplace pretty that the of we've

feel marketplace the our about think Marriott time Marriott with really recognize our feel that So propositions. over We into value good value we really proposition. have partnership really we will value that good about putting and we're we the the

Operator

ahead. question next the comes Blair. go of William with Bob Our from line Please Napoli

Robert Napoli

Thank and working Edmund, you, all and to Toby, with you, your forward help, Toby. thanks look appreciated really for

– obviously TAM talk rates small and XX%, Australia of expect for just business, Are you regards, for more are that's international benefiting and those merchant business relatively know regulation not from having businesses, you XX%, you the What about expectations or those you you types long-term, coverage? what growing growth to being growth of do other popping I still what Can out is in to consumers do your you XX%? bit your small the over those little close the a Express fast SME UK business there? some rates? American think and it I On getting mean international XX% in just the not regulated businesses – relative very

Jeffrey Campbell

with the time and small those enterprise let maybe me a me and take mid-sized at starts business. let one Well, Bob

as in specialized of valuable have we franchise would that one of refocus the all first see until services bring we're in this the the Steve, the as years combine learnings view marketplace to with market, over it and businesses. not I reposition us. market U.S. time, that other country level each kinds company we U.S. part did frankly all to that tremendous value as that’s would large haven’t in replicated probably are commercial U.S. taking that global And and I the our to at U.S. underdeveloped made of into is outside have where competitive under in that pretty and years, outside things providing over and the leader U.S., we – really the many last is We're to say a is marketplace. quite in we was globe. of as well that around it's decision the we we began on you at probably small varies the focus few for many the in in, that a developed say on the them as the small still very the businesses. that the know that help SME thing marketplace, being countries that ourselves from products We tremendously been and it We the environment And the focused all point

and So the growth in continue last area this we focus even now in seen the you’ve a about we couple feel have would quarters of to great it. XX% runway very see we long

to Now proprietary on runway we long the a see also continue side, consumer market. grow as the the to bottom above line

- look in small markets early part we you market continue versus us a our of actually the than long to it's little offer to still things in too we're in really propositions top markets. a differentiated markets growing and faster at say two are all gives our we industry of those ability those recent put the would If value runway suspect the together it's all of competition and to and the the faster grow that's probably those quarter, though XX our data. most that I to have now all comparative But

with find for we opportunities who But of Now, consumer process Australia in to the in us put network what as businesses grow say hand. marketplace. U.S. we as shutting have a proprietary are because I outside dynamics helping products some both is down a can Australia the offer create will their people well into value small that brand you our and broadly and more American we business really to to great Express long the see and runway

Bob. thanks So

Toby Willard

other David, do have you any question?

Operator

of believe Okay, Bruce have Ken of I America. time for take question. line We'll from the one if Bank one we more from

Kenneth Bruce

Jeff, where you am Thank pick the much you help all over for really for your off, years. end to may. going Thank of up I sliding very the me left before I if the call. good in Toby, you luck. here

I obviously, you've reorienting think to proprietary the has and growth a the at some momentum success look that's back of And had towards had I got rates. proprietary businesses, it. strategy fantastic lot As of the

ROE or think GNS, when you high ROE ultimately you on at business. go the was to some business the first growth, what the be the numbers it's will lost it as like and of at the the a into size As remember look in pointed interested of what to like size, we out you’ve look Europe And be looks it’s I'm point? I think overall more may just we Australia. gets terminal very in network out and pointed and that business back always about into it negative business got impact

Jeffrey Campbell

the business, is where said, the And we few because will Bob’s light pursuing on just is Ken on companies there find answer in growth places. a from that the you it shrinking of now of we that have returns, great be GNS business. the smaller Australia pointed overall business The across now opportunities Well, and regulation focused in of response than year will what no little Yes. steady a not driving in matter as which Europe question, material that any ROE. are real in is them impact are some really that we're I to just out network

but opportunities where our long-term Q&A for will returns. deploy strategy, strategy around looking not End can of to the one is evolve. any a broader globe, we in differentiated be will efficiency it produce an we of to into many part And always capital important locked the will So and we critical continue great and plays get GNS best many, but find role places

Toby Willard

it tonight's everybody David, and joining up Great. Thanks for thank there. we Jeff, call. you will wrap

Operator

ladies Thank Executive for gentlemen, conclude today. All AT&T Service. the And for that Teleconference and again you does right. our conference using

disconnect. now may You

American Express (AXP) 18 Apr 182018 Q1 Earnings call transcript