The Nilson Report

Issue 1168 | Jan 2020


Companies featured in this issue include:

U.S. General Purpose Cards, Outstandings as a Percentage of Purchase Volume

American Express Card Results 2019

Discover Card U.S. Results 2019

Income at Top U.S. Credit Card Issuers: Company Net vs. Card Net

Investments in Merchant Acquiring & Processing—2019

American Express Card Results 2019

Results for American Express for calendar year 2019 are shown on the table on page 6. Figures include business generated by cards issued inside and outside the United States.

1. Cards
Global Total 114.4 (million), +0.4%
2. Accounts
Global Total 93.0 (million), +0.4%
3. Transactions
Global Total 8.90 (billion), +6.4%
4. Volume
Global Total $1,240.80 (billion), +6.3%
5. Outstandings
Global Total $172.57 (billion), +3.4%

Full access to the American Express Card Results 2019 is available when you subscribe to The Nilson Report.



Profits at Top U.S. Credit Card Issuers

Please note: Only subscribers can access the charts included with this article.

American Express, JPMorgan Chase, Bank of America, Capital One, Synchrony Financial, Discover Financial Services, Citigroup North America, and U.S. Bancorp Payment Services are the most profitable U.S. payment card companies. Combined they earned $34.66 billion in card profits (pretax net income) last year, an increase of 9.6% over 2018. The eight issuers set aside a combined $31.56 billion at year-end 2019 for anticipated card loan losses. This was up 1.2% or $137.0 million from 2018.

American Express continued as the most profitable company in card payments in the U.S. in 2019. Its Global Consumer Services Group and Global Commercial Services segment had pretax net income of $7.27 billion, up 10.0% over 2018. Amex beat analyst estimates for profits in the fourth quarter, which was the seventh time it beat estimates in the nine most recent quarters. Combined provisions for losses for the Consumer and Commercial segments increased to $3.43 billion, up 6.9% over 2018. 

JPMorgan Chase card income of $5.30 billion grew 6.3% last year from $4.99 billion in 2018. Credit card loan loss allowances grew 9.6% to $5.68 billion. 

Synchrony Financial’s pretax net income for all of its general purpose, private label, and other businesses grew to $4.89 billion, up 34.1% in 2019. Allowances for loan losses dropped 24.6% to $4.18 billion. 

Bank of America’s card business in the U.S. had pretax net income grow 5.8% to $4.53 billion. The allowance for credit losses in the U.S. grew to $3.71 billion, up 3.1%

Capital One’s Domestic Card subsegment’s pretax net income from continuing operations was up 2.0% to $3.97 billion. Provisions for credit losses increased by 0.4% to $4.67 billion. Net interchange revenue grew 9.2% in the fourth quarter. Net charge-offs, which were 4.74% at year-end 2018, dropped to 4.58% at year-end 2019. 

Discover Financial Services’ Direct Banking segment, which includes credit cards, student loans, personal loans, home equity loans, checking and savings accounts, and certificates of deposit, had pretax net income of $3.65 billion, up 5.8%. Its allowance for credit card loan losses increased 14.0% to $2.88 billion. 

Citigroup’s North America Citi-Branded Cards and Citi Retail Services (private label) businesses had net income from continuing operations of $3.03 billion, up 9.1%. Net credit losses plus credit reserve build increased 9.1% to $5.90 billion.

U.S. Bancorp Payment Services, which includes consumer and commercial (small business, corporate, government, purchasing) cards, consumer lines of credit, and merchant processing, had pretax income of $2.02 billion, up 1.7%. Provisions for loan losses increased 2.5% to $1.11 billion.

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