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American Express

AXP is a leading global payments and network company operating a closed-loop business model in which it has the capacity to act as card issuer, payments network, and merchant acquirer. AXP offers a broad range of products including charge and credit cards, but remains focused on transaction volume revenue from the closed-loop model, with a majority of revenue from swipe fees rather than interest income. AXP operates three main segments: Global Consumer Services Group (GCSG) issues cards and provides services to consumers; Global Commercial Services (GCS) issues corporate and small business cards and provides payment/expense mgmt services; and Global Merchant and Network Services (GMNS) operates a global payments network that processes/settles card transactions and acquires merchants, among other services. Net revenues by segment for 3Q18: GCSG (~52%), GCS (~32%), and GMNS (~17%). AXP became a bank holding company (BHC) in late 2008 amidst the height of the credit crisis, and as such is regulated by the Federal Reserve and subject to CCAR. (19 Nov 2018)

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IG Note: Amex Issuing 3Y, 7Y HoldCo Notes

IG Note: 01 Nov 2018, 10:42 AM ET - Amex is in the market with 3Y and 7Y notes out of the HoldCo. IPT on both looks 25-30 bp wide to the secondary, which we still think is priced rich. See value in the 3Y, but in general prefer BAC and JPM at <10 bp spread differential.
Focused

Amex 3Q18: Op Lev Takes the Sting Out of Card Costs

Earnings Note: 19 Oct 2018, 2:59 PM ET - Amex revenues once again topped $10 bn as the company handily beat consensus on the back of its sixth consecutive quarterly 8%+ gain in the top line. Volume and loan growth remains broad-based, while card expense growth bears monitoring.

US Strategy: What to Watch for on 3Q Earning Calls

Strategy Analysis: 11 Oct 2018, 4:37 AM ET - We surveyed our analyst teams for key sector level issues they will be paying close attention to with upcoming third quarter earnings calls beyond the typical sales, margins and earnings guidance. 
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Specialty Finance: Barclays Conference Notes

Sector Analysis: 17 Sep 2018, 5:03 AM ET - We provide presentation write-ups for the slew of specialty finance companies represented at the Barclays 2018 Global Financial Services Conference this week; Ally, AmEx, CIT, Discover, iStar, and Navient.

Register Now: 2018 Global Financials Seminars

Announcement: 10 Sep 2018, 9:51 PM ET - Register for our upcoming fifth annual Global Financials Seminars.
Focused

AmEx: FBI (and OCC) Looking into FX Biz Practices

Worth Watching: 05 Sep 2018, 5:35 PM ET - AmEx (A3/BBB+/A) is reportedly under investigation by the FBI concerning the practices of its foreign exchange unit per the Wall Street Journal. The issue at hand appears focused on potential misrepresentations on the part of AmEx employees off ..

US IG Chart of the Day: The 50 Most Traded Names

Strategy Analysis: 09 Aug 2018, 9:05 AM ET - With declining market liquidity another hot topic, today we look at which names are most often traded. 

Interplay Between US Banks & Fed's Balance Sheet

Sector Analysis: 08 Aug 2018, 5:36 AM ET - In this note, we discuss the impacts of the Fed's balance sheet unwind on banks. We expect that U.S. banks will become the "natural buyers" of U.S. Treasuries not bought by the Fed, offsetting the impact on rates.
Focused

AmEx 2Q18: Revenue Tops $10B as Growth Chugs Along

Earnings Note: 19 Jul 2018, 12:01 AM ET - AmEx beat earnings estimates in 2Q18 and although revenues were a headline miss, the 9% YoY expansion is nothing to sneeze at. We still have our concerns, but results indicate the company is making headway on its strategic growth plans. 

US Banks: Update to 2018 Debt Supply Forecast

Sector Analysis: 09 Jul 2018, 5:49 AM ET - Following a review of 1H18 debt supply, we are increasing our supply forecast for the full year for the banks in our coverage universe. The majority of the increase reflects increased expectations for OpCo debt from the GSIBs.
Focused

US Banks: 2018 CCAR - It's OK to Breach Limits?

Sector Analysis: 29 Jun 2018, 5:15 AM ET - The Fed released the 2018 CCAR results. It did not object to the capital plans of 34 of the 35 banks, the exception being DB USA, Deutsche Bank's IHC. The Fed did not force a number of banks that fell below the minimums to raise capital.
Focused

AmEx: Ultimately Prevails in Anti-Steering Case

Worth Watching: 25 Jun 2018, 9:55 PM ET - AmEx (A3/BBB+) saw a positive outcome in the final resolution to the long-running anti-steering overhang, with the Supreme Court ruling 5-4 in favor of AmEx—the DoJ initially filed the suit back in 2010 with several states signing on as co-plain ..
Focused

US Banks: 2018 DFAST Results - SCB Shocker Looming

Sector Analysis: 22 Jun 2018, 4:56 AM ET - Although all banks over $100 bn in assets received a clean bill of health in the 2018 DFAST, our main concern is that this year’s test could lead to a substantial increase in capital requirements under the proposed Stress Capital Buffer.

Specialty Finance: Conference Recap Notes

Sector Analysis: 14 Jun 2018, 5:41 AM ET - We recap recent presentations by several fincos at the Morgan Stanley Financials conference. The sense we got from card issuers (SYF, DFS) and auto lenders (ALLY) is that consumer credit performance should remain solid and stable in 2Q18.

U.S. Consumer Credit: 1Q18 Trends and Takeaways

Sector Analysis: 24 May 2018, 4:25 AM ET - We delve into the Fed's consumer credit data, analyzing 1Q18 trends across asset classes. We also dig in to recently released data on age distributions and one thing is clear: consumer credit has gotten grayer.

US Banks: Crapo De-reg. Bill Heads to White House

Sector Analysis: 23 May 2018, 10:27 PM ET - The House approved the Senate bill on financial (de)regulation, which is now headed to the White House to be signed into law. While the bill provides regulatory relief for regional/community banks, it has minimal impact on the big-6 banks.
Focused

IG Note: AmEx 3Y HoldCo Notes, Pass Inside IPT

IG Note: 14 May 2018, 10:25 AM ET - AmEx is in the market with 3Y notes out of the HoldCo, shopped at IPT of +80 bp. The short duration and ~15 bp concession is a decent entry point to the name, but assuming final pricing tightens we would pass and retain our Underperform.
Focused

AmEx 1Q18: Strong Earnings Helps Rebuild Capital

Earnings Note: 20 Apr 2018, 1:40 PM ET - AmEx reported quality 1Q18 results, topping expectations on both the bottom and top line as billings growth accelerated slightly. Stay U/P as we still see significantly better value in the bigger banks, even after the relative selloff.
Focused

AmEx: Appoints McAfee CEO Chris Young to Board

Worth Watching: 13 Mar 2018, 9:51 PM ET - AmEx (A3/BBB+) appointed Christopher D. Young to the board to directors, effective immediately. Young currently serves as CEO of cybersecurity firm McAfee—a position he has held since leading the spin-off of the company from Intel in April 2017. P ..
Focused

AmEx: Prices $2 bn Two-Part Offering

Worth Watching: 22 Feb 2018, 8:47 PM ET - AmEx (A3/BBB+) issued $2 bn of notes in a two-part offering, placing $1.6 bn of 5Y fixed-rate notes and $400 mn of floating-rate notes. The 5Y fixed-rate notes priced at $99.909 to yield 77 bp over Treasuries, coming in ~13-18 bp from IPT and pric ..

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