ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
Business Introduction
We are a globally integrated payments company that provides our customers with access to products, insights and experiences that enrich lives and build business success. Our principal products and services are credit and charge card products, along with travel and lifestyle related services, offered to consumers and businesses around the world. Our range of products and services includes:
•Credit card, charge card, banking and other payment and financing products
•Merchant acquisition and processing, servicing and settlement, and point-of-sale marketing and information products and services for merchants
•Network services
•Other fee services, including fraud prevention services and the design and operation of customer loyalty programs
•Expense management products and services
•Travel and lifestyle services
Our various products and services are sold globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations. These products and services are sold through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party vendors and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. Business travel-related services are offered through our non-consolidated joint venture, American Express Global Business Travel (the GBT JV).
We compete in the global payments industry with card networks, issuers and acquirers, paper-based transactions (e.g., cash and checks), bank transfer models (e.g., wire transfers and Automated Clearing House (ACH)), as well as evolving and growing alternative payment and financing providers. As the payments industry continues to evolve, we face increasing competition from non-traditional players that leverage new technologies, business models and customer relationships to create payment or financing solutions.
The following types of revenue are generated from our various products and services:
•Discount revenue, our largest revenue source, primarily represents the amount we earn on transactions occurring at merchants that have entered into a card acceptance agreement with us, or a Global Network Services (GNS) partner or other third-party merchant acquirer, for facilitating transactions between the merchants and Card Members;
•Interest on loans, principally represents interest income earned on outstanding balances;
•Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account;
•Other fees and commissions, primarily represent Card Member delinquency fees, foreign currency conversion fees charged to Card Members, loyalty coalition-related fees, service fees earned from merchants, travel commissions and fees, and Membership Rewards program fees; and
•Other revenue, primarily represents revenues arising from contracts with partners of our GNS business (including commissions and signing fees less issuer rate payments), cross-border Card Member spending, ancillary merchant-related fees, earnings (losses) from equity method investments (including the GBT JV), insurance premiums earned from Card Members, and prepaid card and Travelers Cheque-related revenue.
Refer to the “Glossary of Selected Terminology” for the definitions of certain key terms and related information appearing within this Form 10-Q.
Effective for the first quarter of 2021, we changed the way we describe our volume metrics. Throughout this Report:
•Where we previously used the term “billed business” to describe our total volumes, we now use the term “network volumes.”
•Where we previously used the term “proprietary billed business” to describe transaction volumes from cards and other payment products issued by American Express, we now use the term “billed business.”
•Where we previously used the term “GNS billed business” to describe transaction volumes from cards issued by GNS partners and joint ventures, we now use the term “processed volumes” and have now included in this category transactions associated with certain alternative payment solutions that were not previously reported in our volume metrics.
•Where we previously used the term “Non-T&E-related volume” to describe spend in merchant categories other than travel and entertainment (T&E)-related merchant categories, we now use the term “Goods & Services (G&S)-related volume.”
We believe that these changes provide better differentiation and descriptors for the volumes that run across the American Express network. Prior period amounts have been recast to conform with current period presentation.
Forward-Looking Statements and Non-GAAP Measures
Certain of the statements in this Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to the “Cautionary Note Regarding Forward-Looking Statements” section. We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included within this Form 10-Q constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies.
Bank Holding Company
American Express is a bank holding company under the Bank Holding Company Act of 1956 and The Board of Governors of the Federal Reserve System (the Federal Reserve) is our primary federal regulator. As such, we are subject to the Federal Reserve’s regulations, policies and minimum capital standards.
Business Environment
Our results for the third quarter reflect the strong growth momentum that we have seen in our business over the last several quarters. We continue to see positive results from the increased investments we have made to drive customer acquisition, engagement and retention. Network volumes continued to accelerate on a sequential basis and exceeded pre-pandemic levels for the quarter and credit metrics remained around historic lows.
The Company experienced significant adverse impacts during the prior year due to the COVID-19 pandemic and the resulting containment measures such as lockdowns and travel restrictions implemented by local and national authorities. Year-over-year comparisons for the three-month period reflect the pandemic impact on our business in 2020, with less of an impact for the nine-month period due to the pre-pandemic results for the first two months in the prior year. While the economy has continued to improve, there remains uncertainty related to ongoing effects of the pandemic on the global macroeconomic environment.
Worldwide network volumes for the third quarter increased 29 percent year-over-year and exceeded levels in the third quarter of 2019 (pre-pandemic levels) by 5 percent. Billed business, which represented 85 percent of our total network volumes in the third quarter of 2021 and drives most of our financial results, increased 31 percent and continued to show different paces of recovery for G&S and T&E spend. G&S spend, which accounts for the majority of our billed business, continued to grow sequentially versus the prior quarter and grew by 18 percent on a year-over-year basis, and is now 20 percent above pre-pandemic levels. This growth was primarily driven by ongoing strong performance in online and card-not-present spending even as offline spending exceeded pre-pandemic levels. While T&E spend more than doubled versus the prior year, with continued sequential growth compared to the second quarter, it remained 29 percent below pre-pandemic levels. The year-over-year and sequential growth was primarily driven by U.S. consumer Card Members and small and mid-sized enterprise customers. U.S. billed business increased 32 percent versus the prior year and exceeded pre-pandemic levels by 9 percent. While international billed business grew 28 percent versus the prior year, it remained 8 percent below pre-pandemic levels, as we have historically had a higher mix of T&E spend in our international markets, and we are seeing a slower pace of recovery in T&E spend.
Total revenues net of interest expense increased 25 percent year-over-year reflecting double digit growth in all our non-interest revenue lines. Discount revenue, our largest revenue line, increased 34 percent year-over-year, driven primarily by growth in Card Member spending. Other fees and commissions and Other revenues increased year-over-year, primarily driven by higher travel-related revenues. Net card fees grew 10 percent year over year, as new card acquisitions increased, and Card Member retention remained high. Net interest income grew by 6 percent year-over-year, primarily due to reduced interest expense on deposits and lower outstanding debt, partially offset by lower net interest yields driven by higher paydown rates on revolving loan balances.
Card Member loans increased 11 percent, which was lower than the growth in billed business due to higher paydown rates driven in part by the continued liquidity and financial strength of our customer base. We expect recovery in loan balances and Net interest income to continue to lag the improvement in spend volumes. Provisions for credit losses decreased and resulted in a net benefit, primarily due to lower net write-offs and a higher reserve release driven by improved portfolio quality and a strengthening macroeconomic outlook, partially offset by an increase in the outstanding balance of loans and receivables in the current year. As loan balances begin to rebuild more meaningfully, we expect delinquencies and loss rates to increase slowly over time, however we do not expect to see a material increase in write-off rates in the next few quarters. We are closely monitoring the performance of Card Members exiting our financial relief programs, though early performance indicators are strong. We are mindful that the last of the remaining government stimulus and industry forbearance programs have yet to roll off and we continue to maintain an appropriately significant level of reserves given the remaining uncertainties in the medical and macroeconomic environment.
Card Member rewards, Card Member services and business development expenses are generally correlated to volumes or are variable based on usage, and increased year-over-year due to growth in spend and higher usage of travel-related benefits. Additionally, our higher rewards expense versus last year was partially driven by an increase to our Membership Rewards liability to reflect a higher mix of redemptions in travel-related categories. We continue to make strategic investments in marketing, value propositions on our products, technology, and our colleagues to support our growth momentum. The additional value on several of our premium products is helping to drive increased Card Member engagement and retention rates. We expect marketing investments to remain elevated for the rest of the year while continuing to focus on controlling operating expenses.
Our capital position remains strong, with capital ratios that are well above our targets and regulatory requirements. We are focused on getting back to our Common Equity Tier 1 (CET1) risk-based capital ratio target range of 10 to 11 percent. We returned $3.6 billion of capital to our shareholders during the quarter and plan to continue returning excess capital through share repurchases and dividend payments over the next several quarters.
We remain optimistic that the strength in our business will continue, particularly in the U.S., although we recognize challenges still exist and the pace of recovery remains uneven in different regions of the world. We remain committed to executing our investment strategy for building sustainable long term growth momentum.
See “Certain Legislative, Regulatory and Other Developments” and "Cautionary Note Regarding Forward-Looking Statements" for information on legislative and regulatory changes, additional impacts of the COVID-19 pandemic and other matters that could have a material adverse effect on our results of operations and financial condition.
Results of Operations
The discussions in both the “Consolidated Results of Operations” and “Business Segment Results of Operations” provide commentary on the variances for the three and nine months ended September 30, 2021 compared to the same periods in the prior year, as presented in the accompanying tables. These discussions should be read in conjunction with the discussion under “Business Environment,” which contains further information on the COVID-19 pandemic and the related impacts on our results.
Consolidated Results of Operations
Table 1: Summary of Financial Performance
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
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|
Three Months Ended
September 30,
|
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Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
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|
(Millions, except percentages and per share amounts)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Total revenues net of interest expense
|
|
$
|
10,928
|
|
$
|
8,751
|
|
$
|
2,177
|
|
|
25%
|
|
$
|
30,235
|
|
$
|
26,736
|
|
$
|
3,499
|
|
|
13%
|
|
Provisions for credit losses
|
|
(191)
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|
665
|
|
(856)
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|
#
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|
(1,472)
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|
4,841
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|
(6,313)
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|
|
#
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|
Expenses
|
|
8,669
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|
6,722
|
|
1,947
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|
|
29
|
|
23,324
|
|
19,457
|
|
3,867
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|
|
20
|
|
Pretax income
|
|
2,450
|
|
1,364
|
|
1,086
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|
|
80
|
|
8,383
|
|
2,438
|
|
5,945
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|
|
#
|
|
Income tax provision
|
|
624
|
|
291
|
|
333
|
|
|
#
|
|
2,042
|
|
741
|
|
1,301
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|
|
#
|
|
Net income
|
|
1,826
|
|
1,073
|
|
753
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|
|
70
|
|
6,341
|
|
1,697
|
|
4,644
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|
|
#
|
|
Earnings per common share — diluted (a)
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|
$
|
2.27
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|
$
|
1.30
|
|
$
|
0.97
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|
|
75%
|
|
$
|
7.82
|
|
$
|
2.01
|
|
$
|
5.81
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|
|
#
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|
Return on average equity (b)
|
|
32.6
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%
|
|
15.3
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%
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|
|
|
|
|
32.6
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%
|
|
15.3
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%
|
|
|
|
|
|
Effective tax rate
|
|
25.5
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%
|
|
21.3
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%
|
|
|
|
|
|
24.4
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%
|
|
30.4
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%
|
|
|
|
|
|
# Denotes a variance of 100 percent or more
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(a)Represents net income, less (i) earnings allocated to participating share awards of $14 million and $7 million for the three months ended September 30, 2021 and 2020, respectively, and $45 million and $10 million for the nine months ended September 30, 2021 and 2020, respectively, (ii) dividends on preferred shares of $20 million and $16 million for the three months ended September 30, 2021 and 2020, respectively, and $49 million and $65 million for the nine months ended September 30, 2021 and 2020, respectively, and (iii) an equity-related adjustment of $9 million related to the redemption of preferred shares for the three and nine months ended September 30, 2021. Refer to Note 14 and Note 15 to the "Consolidated Financial Statements" for further details on earnings per common share (EPS) and preferred shares, respectively.
(b)Return on average equity (ROE) is calculated for the relevant periods by dividing the (i) preceding twelve months of net income ($7.8 billion and $3.4 billion for September 30, 2021 and 2020, respectively) by (ii) one-year monthly average of total shareholders’ equity ($23.8 billion and $22.2 billion for September 30, 2021 and 2020, respectively).
Table 2: Total Revenues Net of Interest Expense Summary
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|
|
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|
|
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|
|
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|
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|
|
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|
|
|
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|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
(Millions, except percentages)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Discount revenue
|
|
$
|
6,676
|
|
|
$
|
4,999
|
|
|
$
|
1,677
|
|
|
34%
|
|
$
|
18,245
|
|
|
$
|
14,852
|
|
|
$
|
3,393
|
|
|
23%
|
|
Net card fees (a)
|
|
1,312
|
|
|
1,191
|
|
|
121
|
|
|
10
|
|
3,851
|
|
|
3,442
|
|
|
409
|
|
|
12
|
|
Other fees and commissions
|
|
632
|
|
|
478
|
|
|
154
|
|
|
32
|
|
1,712
|
|
|
1,647
|
|
|
65
|
|
|
4
|
|
Other
|
|
314
|
|
|
209
|
|
|
105
|
|
|
50
|
|
785
|
|
|
707
|
|
|
78
|
|
|
11
|
|
Total non-interest revenues
|
|
8,934
|
|
|
6,877
|
|
|
2,057
|
|
|
30
|
|
24,593
|
|
|
20,648
|
|
|
3,945
|
|
|
19
|
|
Total interest income
|
|
2,301
|
|
|
2,324
|
|
|
(23)
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|
|
(1)
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|
6,633
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|
|
7,796
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|
|
(1,163)
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|
|
(15)
|
|
Total interest expense
|
|
307
|
|
|
450
|
|
|
(143)
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|
|
(32)
|
|
991
|
|
|
1,708
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|
|
(717)
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|
|
(42)
|
|
Net interest income
|
|
1,994
|
|
|
1,874
|
|
|
120
|
|
|
6
|
|
5,642
|
|
|
6,088
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|
|
(446)
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|
|
(7)
|
|
Total revenues net of interest expense
|
|
$
|
10,928
|
|
|
$
|
8,751
|
|
|
$
|
2,177
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|
|
25%
|
|
$
|
30,235
|
|
|
$
|
26,736
|
|
|
$
|
3,499
|
|
|
13%
|
(a)Effective April 1, 2021, we prospectively changed the recognition of certain costs paid to a third party previously recognized in Net card fees. Refer to Note 1 to the “Consolidated Financial Statements” for further details.
Total Revenues Net of Interest Expense
Discount revenue increased for both the three and nine month periods, primarily due to increases in worldwide network volumes of 29 percent and 22 percent, respectively.
See Tables 5, 6 and 7 for more details on network volume performance.
The average discount rate was 2.32 percent and 2.27 percent for the three months ended September 30, 2021 and 2020, respectively, and 2.30 percent and 2.29 percent for the nine months ended September 30, 2021 and 2020, respectively. The increase for both periods was primarily due to the change in the mix of spending driven by increased levels of T&E volumes, compared to the prior year.
Net card fees increased for both the three and nine month periods, primarily driven by our premium card product portfolios. Net card fees are recognized on a straight line basis over a twelve month period and are therefore more stable in relation to short term business or economic shifts.
Other fees and commissions increased for both the three and nine month periods. The increase in the three month period was primarily due to higher foreign exchange conversion revenue related to cross-border Card Member spending and higher travel commissions and fees from our consumer travel business. The increase in the nine month period was primarily driven by higher travel commissions and fees from our consumer travel business, increased revenues from our alternative payment solutions and higher loyalty coalition-related fees, partially offset by a decline in late fees due to lower delinquencies.
Other revenues increased for both the three and nine month periods, primarily driven by a lower net loss in the current year from the GBT JV and an increase in travel insurance revenue.
Interest income decreased for both the three and nine month periods, primarily due to a decline in the interest yield on average Card Member loans driven by higher paydown rates on revolving loan balances.
Interest expense decreased for both the three and nine month periods, primarily driven by lower interest rates paid on deposits and a reduction in outstanding debt.
Table 3: Provisions for Credit Losses Summary
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
(Millions, except percentages)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Card Member receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-offs
|
|
$
|
32
|
|
|
$
|
219
|
|
|
$
|
(187)
|
|
|
(85)%
|
|
$
|
89
|
|
|
$
|
776
|
|
|
$
|
(687)
|
|
|
(89)%
|
|
Reserve (release) build (a)
|
|
(44)
|
|
|
(102)
|
|
|
58
|
|
|
(57)
|
|
(236)
|
|
|
293
|
|
|
(529)
|
|
|
#
|
|
Total
|
|
(12)
|
|
|
117
|
|
|
(129)
|
|
|
#
|
|
(147)
|
|
|
1,069
|
|
|
(1,216)
|
|
|
#
|
|
Card Member loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-offs
|
|
161
|
|
|
523
|
|
|
(362)
|
|
|
(69)
|
|
708
|
|
|
1,750
|
|
|
(1,042)
|
|
|
(60)
|
|
Reserve (release) build (a)
|
|
(338)
|
|
|
48
|
|
|
(386)
|
|
|
#
|
|
(1,854)
|
|
|
1,666
|
|
|
(3,520)
|
|
|
#
|
|
Total
|
|
(177)
|
|
|
571
|
|
|
(748)
|
|
|
#
|
|
(1,146)
|
|
|
3,416
|
|
|
(4,562)
|
|
|
#
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-offs - Other loans (b)
|
|
—
|
|
|
27
|
|
|
(27)
|
|
|
#
|
|
19
|
|
|
80
|
|
|
(61)
|
|
|
(76)
|
|
Net write-offs - Other receivables (c)
|
|
9
|
|
|
12
|
|
|
(3)
|
|
|
(25)
|
|
25
|
|
|
20
|
|
|
5
|
|
|
25
|
|
Reserve (release) build - Other loans (a)(b)
|
|
(5)
|
|
|
(53)
|
|
|
48
|
|
|
(91)
|
|
(171)
|
|
|
198
|
|
|
(369)
|
|
|
#
|
|
Reserve (release) build - Other receivables (a)(c)
|
|
(6)
|
|
|
(9)
|
|
|
3
|
|
|
(33)
|
|
(52)
|
|
|
58
|
|
|
(110)
|
|
|
#
|
|
Total
|
|
(2)
|
|
|
(23)
|
|
|
21
|
|
|
(91)
|
|
(179)
|
|
|
356
|
|
|
(535)
|
|
|
#
|
|
Total provisions for credit losses
|
|
$
|
(191)
|
|
|
$
|
665
|
|
|
$
|
(856)
|
|
|
#
|
|
$
|
(1,472)
|
|
|
$
|
4,841
|
|
|
$
|
(6,313)
|
|
|
#
|
# Denotes a variance of 100 percent or more
(a)Refer to the “Glossary of Selected Terminology” for a definition of reserve (release) build.
(b)Relates to Other loans of $2.4 billion and $2.9 billion, less reserves of $66 million and $238 million, as of September 30, 2021 and December 31, 2020, respectively; and $3.5 billion and $4.8 billion, less reserves of $370 million and $152 million, as of September 30, 2020 and December 31, 2019, respectively.
(c)Relates to Other receivables included in Other assets on the Consolidated Balance Sheets of $2.7 billion and $3.0 billion, less reserves of $33 million, and $85 million, as of September 30, 2021 and December 31, 2020, respectively; and $2.6 billion and $3.1 billion, less reserves of $85 million and $27 million, as of September 30, 2020 and December 31, 2019, respectively.
Provisions for Credit Losses
Card Member receivables provisions for credit losses decreased for both the three and nine month periods and resulted in a net benefit. The decrease for the three month period was primarily driven by lower net write-offs, partially offset by a smaller reserve release in the current period versus the prior period. The decrease for the nine month period was primarily driven by lower net write-offs and a reserve release in the current period versus a reserve build in the prior period. The reserve releases for the current periods were driven by improved portfolio quality and macroeconomic outlook, partially offset by an increase in the outstanding balance of receivables, and for the current nine month period, the reserve release was also driven by lower delinquencies. The reserve release for the prior three month period was due to lower delinquencies. The reserve build for the prior nine month period was due to the deterioration of the global macroeconomic outlook as a result of the COVID-19 pandemic, partially offset by a decrease in the outstanding balances of receivables.
Card Member loans provisions for credit losses decreased for both the three and nine month periods and resulted in a net benefit due to reserve releases in the current periods versus reserve builds in the prior periods, and lower net write-offs. The reserve releases for the current periods were driven by improved portfolio quality and macroeconomic outlook, partially offset by an increase in the outstanding balance of loans, and for the current nine month period, the reserve release was also driven by lower delinquencies. The reserve builds for the prior periods were due to the previously mentioned deterioration of the global macroeconomic outlook, partially offset by a decrease in the outstanding balances of loans and lower delinquencies.
Other provision for credit losses increased for the three month period and decreased for the nine month period. The increase in the three month period was primarily driven by smaller reserve releases in the current period versus the prior period, partially offset by lower net write-offs. The decrease in the nine month period was primarily due to a reserve release in the current period versus a reserve build in the prior period, and lower net write-offs. The reserve releases for both the current and prior three month periods were due to lower balances of non-card loans. The reserve release in the current nine month period was due to lower delinquencies and lower balances of non-card loans, while the reserve build in the prior nine month period was due to the previously mentioned deterioration of the global macroeconomic outlook.
Refer to Note 3 to the “Consolidated Financial Statements” for the range of key variables in the macroeconomic scenarios utilized for the computation of our reserves for credit losses.
Table 4: Expenses Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
(Millions, except percentages)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Marketing and business development
|
|
$
|
2,355
|
|
|
$
|
1,822
|
|
|
$
|
533
|
|
|
29%
|
|
$
|
6,340
|
|
|
$
|
4,889
|
|
|
$
|
1,451
|
|
|
30%
|
|
Card Member rewards
|
|
3,020
|
|
|
2,004
|
|
|
1,016
|
|
|
51
|
|
7,975
|
|
|
5,745
|
|
|
2,230
|
|
|
39
|
|
Card Member services
|
|
579
|
|
|
259
|
|
|
320
|
|
|
#
|
|
1,328
|
|
|
923
|
|
|
405
|
|
|
44
|
|
Total marketing, business development, and Card Member rewards and services
|
|
5,954
|
|
|
4,085
|
|
|
1,869
|
|
|
46
|
|
15,643
|
|
|
11,557
|
|
|
4,086
|
|
|
35
|
|
Salaries and employee benefits
|
|
1,497
|
|
|
1,408
|
|
|
89
|
|
|
6
|
|
4,586
|
|
|
4,152
|
|
|
434
|
|
|
10
|
|
Other, net
|
|
1,218
|
|
|
1,229
|
|
|
(11)
|
|
|
(1)
|
|
3,095
|
|
|
3,748
|
|
|
(653)
|
|
|
(17)
|
|
Total expenses
|
|
$
|
8,669
|
|
|
$
|
6,722
|
|
|
$
|
1,947
|
|
|
29%
|
|
$
|
23,324
|
|
|
$
|
19,457
|
|
|
$
|
3,867
|
|
|
20%
|
Expenses
Marketing and business development expense increased for both the three and nine month periods, primarily due to increases in marketing investments to continue building growth momentum and higher partner payments driven by higher spending volumes.
Card Member rewards expense increased for both the three and nine month periods, primarily driven by increases in Membership Rewards and cash back rewards expenses of $747 million and $1.7 billion and co-brand rewards expense of $269 million and $518 million for the three and nine month periods, respectively, all of which were primarily driven by higher billed business. The increases in Membership Rewards expense were also driven by a larger proportion of spend in categories that earn incremental rewards compared to the prior year and a higher mix of redemptions in travel-related categories, which contributed to an increase in our Membership Rewards liability.
The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent at September 30, 2021 and 96 percent (rounded up) at September 30, 2020.
Card Member services expense increased for both the three and nine month periods, primarily due to higher usage of travel-related benefits.
Salaries and employee benefits expense increased for both the three and nine month periods, primarily driven by higher compensation. The increase in the nine month period was also driven by higher deferred compensation expense.
Other expenses decreased for both the three and nine month periods, primarily driven by higher net unrealized gains in the current year related to our Amex Ventures equity investments. In addition, the decrease for the three month period was also driven by the impact of the implementation of the Proportional Amortization Method (PAM) related to investments in qualified affordable housing projects, partially offset by an increase in professional services expense. Refer to Note 1 to the “Consolidated Financial Statements” for further information on PAM.
Income Taxes
The effective tax rate was 25.5 percent and 21.3 percent for the three months ended September 30, 2021 and 2020, respectively, and 24.4 percent and 30.4 percent for the nine months ended September 30, 2021 and 2020, respectively. The increase in the effective tax rate for the three month period primarily reflected changes in the level and geographic mix of pretax income and discrete tax charges in the current period. The decrease in the effective tax rate for the nine month period primarily reflected discrete tax charges in the prior period related to the realizability of certain foreign deferred tax assets. The current period effective tax rates also reflect the implementation of PAM related to investments in qualified affordable housing projects. Refer to Note 1 to the “Consolidated Financial Statements” for further information.
Table 5: Selected Card-Related Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Three Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
As of or for the
Nine Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Network volumes: (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
232.0
|
|
$
|
174.6
|
|
33
|
%
|
|
$
|
640.8
|
|
$
|
513.2
|
|
25
|
%
|
|
Outside the U.S.
|
|
98.7
|
|
80.9
|
|
22
|
|
|
275.3
|
|
238.7
|
|
15
|
|
|
Total
|
|
$
|
330.7
|
|
$
|
255.5
|
|
29
|
|
|
$
|
916.1
|
|
$
|
751.9
|
|
22
|
|
|
Billed business
|
|
$
|
280.4
|
|
$
|
213.6
|
|
31
|
|
|
$
|
773.6
|
|
$
|
630.9
|
|
23
|
|
|
Processed volumes
|
|
50.3
|
|
41.9
|
|
20
|
|
|
142.5
|
|
121.0
|
|
18
|
|
|
Total
|
|
$
|
330.7
|
|
$
|
255.5
|
|
29
|
|
|
$
|
916.1
|
|
$
|
751.9
|
|
22
|
|
|
Cards-in-force: (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
56.0
|
|
53.6
|
|
4
|
|
|
56.0
|
|
53.6
|
|
4
|
|
|
Outside the U.S.
|
|
63.2
|
|
57.9
|
|
9
|
|
|
63.2
|
|
57.9
|
|
9
|
|
|
Total
|
|
119.2
|
|
111.5
|
|
7
|
|
|
119.2
|
|
111.5
|
|
7
|
|
|
Proprietary
|
|
70.6
|
|
68.8
|
|
3
|
|
|
70.6
|
|
68.8
|
|
3
|
|
|
GNS
|
|
48.6
|
|
42.7
|
|
14
|
|
|
48.6
|
|
42.7
|
|
14
|
|
|
Total
|
|
119.2
|
|
111.5
|
|
7
|
|
|
119.2
|
|
111.5
|
|
7
|
|
|
Basic cards-in-force: (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
44.0
|
|
42.0
|
|
5
|
|
|
44.0
|
|
42.0
|
|
5
|
|
|
Outside the U.S.
|
|
54.3
|
|
48.8
|
|
11
|
|
|
54.3
|
|
48.8
|
|
11
|
|
|
Total
|
|
98.3
|
|
90.8
|
|
8
|
|
|
98.3
|
|
90.8
|
|
8
|
|
|
Average proprietary basic Card Member spending: (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
5,771
|
|
$
|
4,486
|
|
29
|
|
|
$
|
16,106
|
|
$
|
13,110
|
|
23
|
|
|
Outside the U.S.
|
|
3,893
|
|
2,989
|
|
30
|
|
|
10,745
|
|
8,776
|
|
22
|
|
|
Worldwide Average
|
|
$
|
5,231
|
|
$
|
4,041
|
|
29
|
|
|
$
|
14,555
|
|
$
|
11,814
|
|
23
|
|
|
Average discount rate
|
|
2.32
|
%
|
|
2.27
|
%
|
|
|
|
2.30
|
%
|
|
2.29
|
%
|
|
|
|
Average fee per card (dollars)(a)
|
|
$
|
75
|
|
$
|
69
|
|
9
|
%
|
|
$
|
74
|
|
$
|
66
|
|
12
|
%
|
(a)Average fee per card is computed on an annualized basis based on proprietary Net card fees divided by average proprietary total cards-in-force.
Table 6: Network Volumes-Related Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
Year over Year Percentage
Increase (Decrease)
|
|
Year over Year Percentage Increase (Decrease) Assuming No Changes in FX Rates (a)
|
|
Worldwide
|
|
|
|
|
Network volumes
|
29
|
%
|
|
29
|
%
|
|
Total billed business
|
31
|
|
|
31
|
|
|
Consumer billed business
|
34
|
|
|
34
|
|
|
Commercial billed business
|
28
|
|
|
28
|
|
|
Processed volumes
|
20
|
|
|
18
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
Network volumes
|
33
|
|
|
|
|
Total billed business
|
32
|
|
|
|
|
Consumer billed business
|
37
|
|
|
|
|
Commercial billed business
|
28
|
|
|
|
|
|
|
|
|
|
Outside the U.S.
|
|
|
|
|
Network volumes
|
22
|
|
|
20
|
|
|
Total billed business
|
28
|
|
|
25
|
|
|
Consumer billed business
|
27
|
|
|
24
|
|
|
Commercial billed business
|
28
|
|
|
27
|
|
|
Asia Pacific network volumes
|
10
|
|
|
10
|
|
|
Latin America & Canada network volumes
|
39
|
|
|
35
|
|
|
Europe, the Middle East & Africa network volumes
|
36
|
|
|
31
|
|
|
|
|
|
|
|
Merchant Industry Metrics
|
|
|
|
|
Worldwide billed business
|
|
|
|
|
G&S-related (79% of worldwide billed business)
|
18
|
|
|
18
|
|
|
T&E-related (21% of worldwide billed business)
|
126
|
|
|
124
|
|
|
Airline-related (3% of worldwide billed business)
|
429
|
|
|
426
|
%
|
|
U.S. billed business
|
|
|
|
|
G&S-related (80% of U.S. billed business)
|
19
|
|
|
|
|
T&E-related (20% of U.S. billed business)
|
141
|
|
|
|
|
Airline-related (3% of U.S. billed business)
|
421
|
%
|
|
|
(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared).
Table 7: Network Volumes-Related Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
Year over Year Percentage
Increase (Decrease)
|
|
Year over Year Percentage Increase (Decrease) Assuming No Changes in FX Rates (a)
|
|
Worldwide
|
|
|
|
|
Network volumes
|
22
|
%
|
|
20
|
%
|
|
Total billed business
|
23
|
|
|
21
|
|
|
Consumer billed business
|
27
|
|
|
25
|
|
|
Commercial billed business
|
18
|
|
|
16
|
|
|
Processed volumes
|
18
|
|
|
14
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
Network volumes
|
25
|
|
|
|
|
Total billed business
|
24
|
|
|
|
|
Consumer billed business
|
30
|
|
|
|
|
Commercial billed business
|
19
|
|
|
|
|
|
|
|
|
|
Outside the U.S.
|
|
|
|
|
Network Volumes
|
15
|
|
|
9
|
|
|
Total billed business
|
18
|
|
|
11
|
|
|
Consumer billed business
|
21
|
|
|
14
|
|
|
Commercial billed business
|
13
|
|
|
7
|
|
|
Asia Pacific network volumes
|
12
|
|
|
6
|
|
|
Latin America & Canada network volumes
|
18
|
|
|
16
|
|
|
Europe, the Middle East & Africa network volumes
|
20
|
|
|
12
|
|
|
|
|
|
|
|
Merchant Industry Metrics
|
|
|
|
|
Worldwide billed business
|
|
|
|
|
G&S-related (82% of worldwide billed business)
|
19
|
|
|
18
|
|
|
T&E-related (18% of worldwide billed business)
|
39
|
|
|
37
|
|
|
Airline-related (3% of worldwide billed business)
|
27
|
|
|
24
|
%
|
|
U.S. billed business
|
|
|
|
|
G&S-related (82% of U.S. billed business)
|
19
|
|
|
|
|
T&E-related (18% of U.S. billed business)
|
51
|
|
|
|
|
Airline-related (3% of U.S. billed business)
|
45
|
%
|
|
|
(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared).
Table 8: Selected Credit-Related Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Three Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
As of or for the
Nine Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Worldwide Card Member loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Card Member loans: (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
67.5
|
|
$
|
61.4
|
|
10
|
%
|
|
$
|
67.5
|
|
$
|
61.4
|
|
10
|
%
|
|
Outside the U.S.
|
|
9.5
|
|
8.2
|
|
16
|
|
|
9.5
|
|
8.2
|
|
16
|
|
|
Total
|
|
$
|
77.0
|
|
$
|
69.6
|
|
11
|
|
|
$
|
77.0
|
|
$
|
69.6
|
|
11
|
|
|
Credit loss reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
3,835
|
|
$
|
5,628
|
|
(32)
|
|
|
$
|
5,344
|
|
$
|
4,027
|
|
33
|
|
|
Provisions - principal, interest and fees
|
|
(177)
|
|
571
|
|
#
|
|
(1,146)
|
|
3,416
|
|
#
|
|
Net write-offs — principal less recoveries
|
|
(118)
|
|
(432)
|
|
(73)
|
|
|
(544)
|
|
(1,449)
|
|
(62)
|
|
|
Net write-offs — interest and fees less recoveries
|
|
(43)
|
|
(91)
|
|
(53)
|
|
|
(164)
|
|
(301)
|
|
(46)
|
|
|
Other (a)
|
|
$
|
(8)
|
|
$
|
12
|
|
#
|
|
(1)
|
|
(5)
|
|
(80)
|
|
|
Ending balance
|
|
$
|
3,489
|
|
$
|
5,688
|
|
(39)
|
|
|
$
|
3,489
|
|
$
|
5,688
|
|
(39)
|
|
|
% of loans
|
|
4.5
|
%
|
|
8.2
|
%
|
|
|
|
4.5
|
%
|
|
8.2
|
%
|
|
|
|
% of past due
|
|
666
|
%
|
|
679
|
%
|
|
|
|
666
|
%
|
|
679
|
%
|
|
|
|
Average loans (billions)
|
|
$
|
76.4
|
|
|
$
|
69.9
|
|
|
9
|
|
|
$
|
73.4
|
|
|
$
|
75.4
|
|
|
(3)
|
|
|
Net write-off rate — principal only (b)
|
|
0.6
|
%
|
|
2.5
|
%
|
|
|
|
1.0
|
%
|
|
2.6
|
%
|
|
|
|
Net write-off rate — principal, interest and fees (b)
|
|
0.8
|
|
|
3.0
|
|
|
|
|
1.3
|
|
|
3.1
|
|
|
|
|
30+ days past due as a % of total
|
|
0.7
|
%
|
|
1.2
|
%
|
|
|
|
0.7
|
%
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Card Member receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Card Member receivables: (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
34.8
|
|
$
|
29.2
|
|
19
|
|
|
$
|
34.8
|
|
$
|
29.2
|
|
19
|
|
|
Outside the U.S.
|
|
14.0
|
|
11.6
|
|
21
|
|
|
14.0
|
|
$
|
11.6
|
|
21
|
|
|
Total
|
|
$
|
48.8
|
|
$
|
40.8
|
|
20
|
|
|
$
|
48.8
|
|
$
|
40.8
|
|
20
|
|
|
Credit loss reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
73
|
|
$
|
519
|
|
(86)
|
|
|
$
|
267
|
|
$
|
126
|
|
#
|
|
Provisions - principal and fees
|
|
(12)
|
|
117
|
|
#
|
|
(147)
|
|
1,069
|
|
#
|
|
Net write-offs - principal and fees less recoveries (c)
|
|
(32)
|
|
(219)
|
|
(85)
|
|
|
(89)
|
|
(776)
|
|
(89)
|
|
|
Other (a)
|
|
1
|
|
5
|
|
(80)
|
|
|
(1)
|
|
3
|
|
#
|
|
Ending balance
|
|
$
|
30
|
|
$
|
422
|
|
(93)
|
%
|
|
$
|
30
|
|
$
|
422
|
|
(93)
|
%
|
|
% of receivables
|
|
0.1
|
%
|
|
1.0
|
%
|
|
|
|
0.1
|
%
|
|
1.0
|
%
|
|
|
|
Net write-off rate — principal and fees (b)(c)(d)
|
|
0.3
|
%
|
|
2.2
|
%
|
|
|
|
0.3
|
%
|
|
2.3
|
%
|
|
|
# Denotes a variance of 100 percent or more
(a)Other includes foreign currency translation adjustments.
(b)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(c)The current nine month period includes a $37 million partial recovery in Card Member receivables related to a corporate client bankruptcy, which had resulted in a $53 million write-off in the prior year in the Global Commercial Services (GCS) segment.
(d)Refer to Tables 11 and 14 for Net write-off rate - principal only and 30+ days past due metrics for Global Consumer Services Group (GCSG) and Global Small Business Services (GSBS) receivables, respectively. A net write-off rate based on principal losses only for Global Corporate Payments (GCP), which reflects global, large and middle market corporate accounts, is not available due to system constraints.
Table 9: Net Interest Yield on Average Card Member Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net interest income
|
|
$
|
1,994
|
|
$
|
1,874
|
|
$
|
5,642
|
|
$
|
6,088
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
Interest expense not attributable to our Card Member loan portfolio (a)
|
|
172
|
|
296
|
|
603
|
|
1,041
|
|
Interest income not attributable to our Card Member loan portfolio (b)
|
|
(92)
|
|
(137)
|
|
(281)
|
|
(557)
|
|
Adjusted net interest income (c)
|
|
$
|
2,074
|
|
$
|
2,033
|
|
$
|
5,964
|
|
$
|
6,572
|
|
Average Card Member loans (billions)
|
|
$
|
76.4
|
|
$
|
69.9
|
|
$
|
73.4
|
|
$
|
75.4
|
|
Net interest income divided by average Card Member loans (c)
|
|
10.4
|
%
|
|
10.7
|
%
|
|
10.2
|
%
|
|
10.8
|
%
|
|
Net interest yield on average Card Member loans (c)
|
|
10.8
|
%
|
|
11.6
|
%
|
|
10.9
|
%
|
|
11.6
|
%
|
(a)Primarily represents interest expense attributable to maintaining our corporate liquidity pool and funding Card Member receivables.
(b)Primarily represents interest income attributable to Other loans, interest-bearing deposits and the fixed income investment portfolios.
(c)Adjusted net interest income and net interest yield on average Card Member loans are non-GAAP measures. Refer to “Glossary of Selected Terminology” for the definitions of these terms. We believe adjusted net interest income is useful to investors because it represents the interest expense and interest income attributable to our Card Member loan portfolio and is a component of net interest yield on average Card Member loans, which provides a measure of profitability of our Card Member loan portfolio. Net interest yield on average Card Member loans reflects adjusted net interest income divided by average Card Member loans, computed on an annualized basis. Net interest income divided by average Card Member loans, computed on an annualized basis, a GAAP measure, includes elements of total interest income and total interest expense that are not attributable to the Card Member loan portfolio, and thus is not representative of net interest yield on average Card Member loans.
Business Segment Results of Operations
As a result of organizational changes announced during the second quarter of 2021, our loyalty coalition businesses results, which were previously reported within the Global Merchant and Network Services (GMNS) segment, are now reported within the GCSG segment. Prior period segment results have been revised to conform with current period presentation.
Global Consumer Services Group
Table 10: GCSG Selected Income Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
|
|
Nine Months Ended
September 30,
|
|
Change
|
|
(Millions, except percentages)
|
|
2021
|
|
2020
|
|
2021 vs. 2020
|
|
2021
|
|
2020
|
|
2021 vs. 2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest revenues
|
|
$
|
4,699
|
|
$
|
3,632
|
|
$
|
1,067
|
|
|
29%
|
|
$
|
12,982
|
|
$
|
10,662
|
|
$
|
2,320
|
|
|
22%
|
|
Interest income
|
|
1,879
|
|
1,916
|
|
(37)
|
|
|
(2)
|
|
5,436
|
|
6,298
|
|
(862)
|
|
|
(14)
|
|
Interest expense
|
|
174
|
|
244
|
|
(70)
|
|
|
(29)
|
|
536
|
|
844
|
|
(308)
|
|
|
(36)
|
|
Net interest income
|
|
1,705
|
|
1,672
|
|
33
|
|
|
2
|
|
4,900
|
|
5,454
|
|
(554)
|
|
|
(10)
|
|
Total revenues net of interest expense
|
|
6,404
|
|
5,304
|
|
1,100
|
|
|
21
|
|
17,882
|
|
16,116
|
|
1,766
|
|
|
11
|
|
Provisions for credit losses
|
|
(126)
|
|
411
|
|
(537)
|
|
|
#
|
|
(972)
|
|
3,107
|
|
(4,079)
|
|
|
#
|
|
Total revenues net of interest expense after provisions for credit losses
|
|
6,530
|
|
4,893
|
|
1,637
|
|
|
33
|
|
18,854
|
|
13,009
|
|
5,845
|
|
|
45
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, business development, and Card Member rewards and services
|
|
3,791
|
|
2,547
|
|
1,244
|
|
|
49
|
|
9,745
|
|
7,042
|
|
2,703
|
|
|
38
|
|
Salaries and employee benefits and other operating expenses
|
|
1,251
|
|
1,221
|
|
30
|
|
|
2
|
|
3,584
|
|
3,740
|
|
(156)
|
|
|
(4)
|
|
Total expenses
|
|
5,042
|
|
3,768
|
|
1,274
|
|
|
34%
|
|
13,329
|
|
10,782
|
|
2,547
|
|
|
24%
|
|
Pretax segment income
|
|
$
|
1,488
|
|
$
|
1,125
|
|
$
|
363
|
|
|
32%
|
|
$
|
5,525
|
|
$
|
2,227
|
|
$
|
3,298
|
|
|
#
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# Denotes a variance of 100 percent or more
GCSG primarily issues a wide range of proprietary consumer cards globally. GCSG also provides services to consumers, including travel and lifestyle services and non-card financing products, and manages certain international joint ventures, our partnership agreements in China and our loyalty coalition businesses operated in certain countries.
Non-interest revenues increased for both the three and nine month periods, primarily driven by higher Discount revenue, Net card fees and Other fees and commissions.
Discount revenue increased 37 percent and 28 percent for the three and nine month periods, respectively, reflecting an increase in consumer billed business of 34 percent and 27 percent for the three and nine month periods, respectively, primarily due to the change in the mix of spending driven by increased levels of T&E volumes, compared to the prior year.
See Tables 5, 6, 7 and 11 for more details on volume metrics.
Net card fees increased 11 percent and 13 percent for the three and nine month periods, respectively, primarily driven by year-over-year increases in the average fee per card of our premium card products.
Other fees and commissions increased 26 percent and 6 percent for the three and nine month periods, respectively. The increase in the three month period was primarily due to higher travel commissions and fees from our consumer travel business and higher foreign exchange conversion revenue related to increased cross-border Card Member spending. The increase in the nine month period was primarily due to higher travel commissions and fees from our consumer travel business and higher loyalty coalition-related fees, partially offset by a decline in late fees due to lower delinquencies.
Net interest income increased for the three month period and decreased for the nine month period. The increase in the three month period was primarily due to lower cost of funds, partially offset by a decline in interest income driven by lower revolving Card Member loan balances. The decrease in the nine month period was primarily driven by lower revolving Card Member loan balances.
Provisions for credit losses decreased and resulted in a net benefit for both the three and nine month periods. The decrease for the three month period was primarily driven by lower net write-offs and higher reserve releases in the current period versus the prior period. The current period reserve releases were driven by improved portfolio quality and macroeconomic outlook, partially offset by increases in the outstanding balances of loans and receivables. The prior period reserve releases were driven by improved portfolio quality, partially offset by deterioration of the global macroeconomic outlook.
The decrease for the nine month period was primarily driven by lower net write-offs and reserve releases in the current period versus reserve builds in the prior period. The current period reserve releases were driven by improved portfolio quality and macroeconomic outlook, partially offset by increases in the outstanding balances of loans and receivables. The prior period reserve builds were due to the deterioration of the global macroeconomic outlook as a result of the COVID-19 pandemic, partially offset by decreases in the outstanding balances of loans and receivables.
Marketing, business development, and Card Member rewards and services expenses increased for both the three and nine month periods. The increases in Card Member rewards expense were primarily driven by higher billed business as well as higher travel-related spend and redemptions and a shift in the prior year in redemptions to non-travel-related options. The increases in Marketing and business development expense were primarily due to increases in marketing investments to continue building growth momentum as well as higher spending volumes. The increases in Card Member services expense were primarily due to higher usage of travel-related benefits.
Table 11: GCSG Selected Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Three Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
As of or for the
Nine Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Billed business: (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
114.9
|
|
$
|
83.9
|
|
37
|
%
|
|
$
|
314.7
|
|
$
|
242.9
|
|
30
|
%
|
|
Outside the U.S.
|
|
38.2
|
|
30.2
|
|
26
|
|
|
104.3
|
|
86.4
|
|
21
|
|
|
Total
|
|
$
|
153.1
|
|
$
|
114.1
|
|
34
|
|
|
$
|
419.0
|
|
$
|
329.3
|
|
27
|
|
|
Proprietary cards-in-force:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
38.7
|
|
37.5
|
|
3
|
|
|
38.7
|
|
37.5
|
|
3
|
|
|
Outside the U.S.
|
|
16.8
|
|
16.8
|
|
—
|
|
|
16.8
|
|
16.8
|
|
—
|
|
|
Total
|
|
55.5
|
|
54.3
|
|
2
|
|
|
55.5
|
|
54.3
|
|
2
|
|
|
Proprietary basic cards-in-force:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
27.2
|
|
26.5
|
|
3
|
|
|
27.2
|
|
26.5
|
|
3
|
|
|
Outside the U.S.
|
|
11.7
|
|
11.7
|
|
—
|
|
|
11.7
|
|
11.7
|
|
—
|
|
|
Total
|
|
38.9
|
|
38.2
|
|
2
|
|
|
38.9
|
|
38.2
|
|
2
|
|
|
Average proprietary basic Card Member spending: (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
4,255
|
|
$
|
3,162
|
|
35
|
|
|
$
|
11,731
|
|
$
|
9,080
|
|
29
|
|
|
Outside the U.S.
|
|
$
|
3,278
|
|
$
|
2,555
|
|
28
|
|
|
$
|
8,982
|
|
$
|
7,209
|
|
25
|
|
|
Average
|
|
$
|
3,960
|
|
$
|
2,975
|
|
33
|
|
|
$
|
10,901
|
|
$
|
8,501
|
|
28
|
|
|
Total segment assets (billions)
|
|
$
|
91.8
|
|
$
|
81.9
|
|
12
|
|
|
$
|
91.8
|
|
$
|
81.9
|
|
12
|
|
|
Card Member loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
52.6
|
|
$
|
49.8
|
|
6
|
|
|
$
|
52.6
|
|
$
|
49.8
|
|
6
|
|
|
Outside the U.S.
|
|
9.0
|
|
7.7
|
|
17
|
|
|
9.0
|
|
7.7
|
|
17
|
|
|
Total
|
|
$
|
61.6
|
|
$
|
57.5
|
|
7
|
|
|
$
|
61.6
|
|
$
|
57.5
|
|
7
|
|
|
Average loans (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
52.3
|
|
$
|
50.0
|
|
5
|
|
|
$
|
50.5
|
|
$
|
53.8
|
|
(6)
|
|
|
Outside the U.S.
|
|
8.9
|
|
7.8
|
|
14
|
|
|
8.5
|
|
8.6
|
|
(1)
|
|
|
Total
|
|
$
|
61.2
|
|
$
|
57.8
|
|
6
|
%
|
|
$
|
59.0
|
|
$
|
62.4
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate - principal only (a)
|
|
0.5
|
%
|
|
2.4
|
%
|
|
|
|
0.9
|
%
|
|
2.6
|
%
|
|
|
|
Net write-off rate - principal, interest and fees (a)
|
|
0.8
|
|
|
2.9
|
|
|
|
|
1.2
|
|
|
3.1
|
|
|
|
|
30+ days past due as a % of total
|
|
0.7
|
|
|
1.1
|
|
|
|
|
0.7
|
|
|
1.1
|
|
|
|
|
Outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate - principal only (a)
|
|
1.3
|
|
|
3.3
|
|
|
|
|
2.0
|
|
|
3.2
|
|
|
|
|
Net write-off rate - principal, interest and fees (a)
|
|
1.7
|
|
|
4.1
|
|
|
|
|
2.6
|
|
|
4.0
|
|
|
|
|
30+ days past due as a % of total
|
|
1.0
|
|
|
1.8
|
|
|
|
|
1.0
|
|
|
1.8
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate – principal only (a)
|
|
0.7
|
|
|
2.5
|
|
|
|
|
1.1
|
|
|
2.7
|
|
|
|
|
Net write-off rate – principal, interest and fees (a)
|
|
0.9
|
|
|
3.1
|
|
|
|
|
1.4
|
|
|
3.2
|
|
|
|
|
30+ days past due as a % of total
|
|
0.7
|
%
|
|
1.2
|
%
|
|
|
|
0.7
|
%
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Three Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
As of or for the
Nine Months Ended
September 30,
|
|
Change
2021
vs.
2020
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Card Member receivables: (billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
12.6
|
|
$
|
10.3
|
|
22
|
%
|
|
$
|
12.6
|
|
$
|
10.3
|
|
22
|
%
|
|
Outside the U.S.
|
|
6.9
|
|
5.8
|
|
19
|
|
|
6.9
|
|
5.8
|
|
19
|
|
|
Total receivables
|
|
$
|
19.5
|
|
$
|
16.1
|
|
21
|
%
|
|
$
|
19.5
|
|
$
|
16.1
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate – principal only (a)
|
|
—
|
%
|
|
1.0
|
%
|
|
|
|
—
|
%
|
|
1.6
|
%
|
|
|
|
Net write-off rate – principal and fees (a)
|
|
0.1
|
|
|
1.1
|
|
|
|
|
—
|
|
|
1.7
|
|
|
|
|
30+ days past due as a % of total
|
|
0.4
|
|
|
0.6
|
|
|
|
|
0.4
|
|
|
0.6
|
|
|
|
|
Outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate – principal only (a)
|
|
0.6
|
|
|
2.8
|
|
|
|
|
1.0
|
|
|
2.9
|
|
|
|
|
Net write-off rate – principal and fees (a)
|
|
0.7
|
|
|
3.1
|
|
|
|
|
1.1
|
|
|
3.1
|
|
|
|
|
30+ days past due as a % of total
|
|
0.7
|
|
|
1.2
|
|
|
|
|
0.7
|
|
|
1.2
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net write-off rate – principal only (a)
|
|
0.2
|
|
|
1.7
|
|
|
|
|
0.3
|
|
|
2.0
|
|
|
|
|
Net write-off rate – principal and fees (a)
|
|
0.3
|
|
|
1.8
|
|
|
|
|
0.4
|
|
|
2.2
|
|
|
|
|
30+ days past due as a % of total
|
|
0.5
|
%
|
|
0.8
|
%
|
|
|
|
0.5
|
%
|
|
0.8
|
%
|
|
|
(a)Refer to Table 8 footnote (b).
Table 12: GCSG Net Interest Yield on Average Card Member Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
U.S.
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
1,524
|
|
$
|
1,470
|
|
$
|
4,337
|
|
$
|
4,732
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
Interest expense not attributable to our Card Member loan portfolio (a)
|
|
31
|
|
81
|
|
135
|
|
224
|
|
Interest income not attributable to our Card Member loan portfolio (b)
|
|
(27)
|
|
(42)
|
|
(74)
|
|
(156)
|
|
Adjusted net interest income (c)
|
|
$
|
1,528
|
|
$
|
1,509
|
|
$
|
4,398
|
|
$
|
4,800
|
|
Average Card Member loans (billions)
|
|
$
|
52.3
|
|
$
|
50.0
|
|
$
|
50.5
|
|
$
|
53.8
|
|
Net interest income divided by average Card Member loans (c)
|
|
11.7
|
%
|
|
11.8
|
%
|
|
11.5
|
%
|
|
11.7
|
%
|
|
Net interest yield on average Card Member loans (c)
|
|
11.6
|
%
|
|
12.0
|
%
|
|
11.7
|
%
|
|
11.9
|
%
|
|
Outside the U.S.
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
181
|
|
$
|
202
|
|
$
|
563
|
|
$
|
721
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
Interest expense not attributable to our Card Member loan portfolio (a)
|
|
29
|
|
36
|
|
81
|
|
71
|
|
Interest income not attributable to our Card Member loan portfolio (b)
|
|
(2)
|
|
(3)
|
|
(6)
|
|
(9)
|
|
Adjusted net interest income (c)
|
|
$
|
208
|
|
$
|
235
|
|
$
|
638
|
|
$
|
783
|
|
Average Card Member loans (billions)
|
|
$
|
8.9
|
|
$
|
7.8
|
|
$
|
8.6
|
|
$
|
8.6
|
|
Net interest income divided by average Card Member loans (c)
|
|
8.1
|
%
|
|
10.4
|
%
|
|
8.7
|
%
|
|
11.2
|
%
|
|
Net interest yield on average Card Member loans (c)
|
|
9.3
|
%
|
|
11.9
|
%
|
|
10.0
|
%
|
|
12.2
|
%
|
|
Total
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
1,705
|
|
$
|
1,672
|
|
$
|
4,900
|
|
$
|
5,454
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
Interest expense not attributable to our Card Member loan portfolio (a)
|
|
60
|
|
117
|
|
216
|
|
295
|
|
Interest income not attributable to our Card Member loan portfolio (b)
|
|
(29)
|
|
(45)
|
|
(80)
|
|
(166)
|
|
Adjusted net interest income (c)
|
|
$
|
1,736
|
|
$
|
1,744
|
|
$
|
5,036
|
|
$
|
5,583
|
|
Average Card Member loans (billions)
|
|
$
|
61.2
|
|
$
|
57.8
|
|
$
|
59.0
|
|
$
|
62.4
|
|
Net interest income divided by average Card Member loans (c)
|
|
11.1
|
%
|
|
11.6
|
%
|
|
11.1
|
%
|
|
11.7
|
%
|
|
Net interest yield on average Card Member loans (c)
|
|
11.3
|
%
|
|
12.0
|
%
|
|
11.4
|
%
|
|
12.0
|
%
|
(a)Refer to Table 9 footnote (a).
(b)Refer to Table 9 footnote (b).
(c)Refer to Table 9 footnote (c).
Global Commercial Services
Table 13: GCS Selected Income Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
(Millions, except percentages)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest revenues
|
|
$
|
2,978
|
|
$
|
2,327
|
|
$
|
651
|
|
|
28
|
%
|
|
$
|
8,225
|
|
$
|
7,129
|
|
$
|
1,096
|
|
|
15
|
%
|
|
Interest income
|
|
378
|
|
351
|
|
27
|
|
|
8
|
|
|
1,059
|
|
1,252
|
|
(193)
|
|
|
(15)
|
|
|
Interest expense
|
|
111
|
|
139
|
|
(28)
|
|
|
(20)
|
|
|
338
|
|
493
|
|
(155)
|
|
|
(31)
|
|
|
Net interest income
|
|
267
|
|
212
|
|
55
|
|
|
26
|
|
|
721
|
|
759
|
|
(38)
|
|
|
(5)
|
|
|
Total revenues net of interest expense
|
|
3,245
|
|
2,539
|
|
706
|
|
|
28
|
|
|
8,946
|
|
7,888
|
|
1,058
|
|
|
13
|
|
|
Provisions for credit losses
|
|
(67)
|
|
250
|
|
(317)
|
|
|
#
|
|
(464)
|
|
1,657
|
|
(2,121)
|
|
|
#
|
|
Total revenues net of interest expense after provisions for credit losses
|
|
3,312
|
|
2,289
|
|
1,023
|
|
|
45
|
|
|
9,410
|
|
6,231
|
|
3,179
|
|
|
51
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, business development, and Card Member rewards and services
|
|
1,757
|
|
1,221
|
|
536
|
|
|
44
|
|
|
4,773
|
|
3,653
|
|
1,120
|
|
|
31
|
|
|
Salaries and employee benefits and other operating expenses
|
|
837
|
|
796
|
|
41
|
|
|
5
|
|
|
2,415
|
|
2,309
|
|
106
|
|
|
5
|
|
|
Total expenses
|
|
2,594
|
|
2,017
|
|
577
|
|
|
29
|
|
|
7,188
|
|
5,962
|
|
1,226
|
|
|
21
|
|
|
Pretax segment income
|
|
$
|
718
|
|
$
|
272
|
|
$
|
446
|
|
|
#
|
|
$
|
2,222
|
|
$
|
269
|
|
$
|
1,953
|
|
|
#
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# Denotes a variance of 100 percent or more
GCS primarily issues a wide range of proprietary corporate and small business cards globally. GCS also provides payment, expense management and commercial financing products.
Non-interest revenues increased for both the three and nine month periods, primarily driven by higher Discount revenue, Other fees and commissions and Net card fees.
Discount revenue increased 30 percent and 17 percent for the three and nine month periods, respectively, reflecting an increase in commercial billed business of 28 percent and 18 percent for the three and nine month periods, respectively.
See Tables 5, 6, 7 and 14 for more details on volume metrics.
Other fees and commissions increased 44 percent for the three month period and decreased 1 percent for the nine month period. The increase in the three month period was primarily due to increased revenues from our alternative payment solutions and higher foreign exchange conversion revenue related to increased cross-border Card Member spending. The decrease in the nine month period was primarily due to a decline in late fees due to lower delinquencies, partially offset by increased revenues from our alternative payment solutions.
Net card fees increased 7 percent and 9 percent for the three and nine month periods, respectively, driven by growth in our premium card products.
Net interest income increased for the three month period and decreased for the nine month period. The increase in the three month period was primarily due to lower cost of funds and higher average Card Member loan balances. The decrease in the nine month period was primarily driven by lower revolving Card Member loan balances.
Provisions for credit losses decreased for both the three and nine month periods and resulted in a net benefit due to lower write-offs and reserve releases in the current periods versus reserve builds in the prior periods. The reserve releases in the current periods were driven by improved portfolio quality and macroeconomic outlook, partially offset by increases in the outstanding balances of loans and receivables. The significant reserve builds in the prior periods were due to the deterioration of the global macroeconomic outlook as a result of the COVID-19 pandemic, partially offset by decreases in the outstanding balances of loans and receivables.
Marketing, business development, and Card Member rewards and services expenses increased for both the three and nine month periods. The increases in Card Member rewards expense were primarily driven by higher billed business as well as higher travel-related spend and redemptions and a shift in the prior year in redemptions to non-travel-related options. The increases in Marketing and business development expense were primarily due to increases in marketing investments to continue building growth momentum as well as, for the three month period, an increase in corporate client incentives due to higher spending volumes. The increase in the nine month period also included higher partner payments, partially offset by a decrease in corporate client incentives.
Salaries and employee benefits and other operating expenses increased for both the three and nine month periods, primarily due to higher compensation. The increase in the nine month period was also driven by the Company's partial repayment of a prior year insurance claim associated with insured losses from a corporate client bankruptcy that were partially recovered during the current period.
Table 14: GCS Selected Statistical Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
Three Months Ended
September 30,
|
|
Change 2021 vs 2020
|
|
As of or for the
Nine Months Ended
September 30,
|
|
Change 2021 vs 2020
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Billed business (billions)
|
|
$
|
126.1
|
|
$
|
98.5
|
|
28
|
%
|
|
$
|
350.0
|
|
$
|
297.4
|
|
18
|
%
|
|
Proprietary cards-in-force
|
|
15.1
|
|
14.5
|
|
4
|
|
|
15.1
|
|
14.5
|
|
4
|
|
|
Average Card Member spending (dollars)
|
|
$
|
8,447
|
|
$
|
6,776
|
|
25
|
|
|
$
|
23,790
|
|
$
|
20,268
|
|
17
|
|
|
Total segment assets (billions)
|
|
$
|
48.2
|
|
$
|
39.9
|
|
21
|
|
|
$
|
48.2
|
|
$
|
39.9
|
|
21
|
|
|
GSBS Card Member loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans (billions)
|
|
$
|
15.3
|
|
$
|
12.0
|
|
28
|
|
|
$
|
15.3
|
|
$
|
12.0
|
|
28
|
|
|
Average loans (billions)
|
|
$
|
15.2
|
|
$
|
12.1
|
|
26
|
|
|
$
|
14.3
|
|
$
|
13.0
|
|
10
|
|
|
Net write-off rate - principal only (a)
|
|
0.5
|
%
|
|
2.2
|
%
|
|
|
|
0.7
|
%
|
|
2.1
|
%
|
|
|
|
Net write-off rate - principal, interest and fees (a)
|
|
0.6
|
%
|
|
2.5
|
%
|
|
|
|
0.8
|
%
|
|
2.4
|
%
|
|
|
|
30+ days past due as a % of total
|
|
0.5
|
%
|
|
1.1
|
%
|
|
|
|
0.5
|
%
|
|
1.1
|
%
|
|
|
|
Calculation of Net Interest Yield on Average Card Member Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
267
|
|
$
|
212
|
|
|
|
$
|
721
|
|
$
|
759
|
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense not attributable to our Card Member loan portfolio (b)
|
|
88
|
|
111
|
|
|
|
269
|
|
375
|
|
|
|
Interest income not attributable to our Card Member loan portfolio (c)
|
|
(17)
|
|
(34)
|
|
|
|
(62)
|
|
(145)
|
|
|
|
Adjusted net interest income (d)
|
|
$
|
338
|
|
$
|
289
|
|
|
|
$
|
928
|
|
$
|
989
|
|
|
|
Average Card Member loans (billions)
|
|
$
|
15.2
|
|
$
|
12.1
|
|
|
|
$
|
14.4
|
|
$
|
13.1
|
|
|
|
Net interest income divided by average Card Member loans (d)
|
|
7.0
|
%
|
|
7.0
|
%
|
|
|
|
6.7
|
%
|
|
7.7
|
%
|
|
|
|
Net interest yield on average Card Member loans (d)
|
|
8.8
|
%
|
|
9.5
|
%
|
|
|
|
8.6
|
%
|
|
10.1
|
%
|
|
|
|
Card Member receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total receivables (billions)
|
|
$
|
29.3
|
|
$
|
24.7
|
|
19
|
|
|
$
|
29.3
|
|
24.7
|
|
19
|
|
|
Net write-off rate - principal and fees (a)(e)(f)
|
|
0.2
|
%
|
|
2.5
|
%
|
|
|
|
0.2
|
%
|
|
2.4
|
%
|
|
|
|
GCP Card Member receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total receivables (billions)
|
|
$
|
12.5
|
|
$
|
10.4
|
|
20
|
|
|
$
|
12.5
|
|
$
|
10.4
|
|
20
|
|
|
90+ days past billing as a % of total (e)
|
|
0.3
|
%
|
|
0.6
|
%
|
|
|
|
0.3
|
%
|
|
0.6
|
%
|
|
|
|
Net write-off rate - principal and fees (a)(e)(f)
|
|
0.2
|
%
|
|
2.4
|
%
|
|
|
|
(0.1)
|
%
|
|
2.2
|
%
|
|
|
|
GSBS Card Member receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total receivables (billions)
|
|
$
|
16.8
|
|
$
|
14.3
|
|
17
|
%
|
|
$
|
16.8
|
|
$
|
14.3
|
|
17
|
%
|
|
Net write-off rate - principal only (a)
|
|
0.2
|
%
|
|
2.3
|
%
|
|
|
|
0.3
|
%
|
|
2.3
|
%
|
|
|
|
Net write-off rate - principal and fees (a)
|
|
0.3
|
%
|
|
2.5
|
%
|
|
|
|
0.4
|
%
|
|
2.6
|
%
|
|
|
|
30+ days past due as a % of total
|
|
0.6
|
%
|
|
1.0
|
%
|
|
|
|
0.6
|
%
|
|
1.0
|
%
|
|
|
(a)Refer to Table 8 footnote (b).
(b)Refer to Table 9 footnote (a).
(c)Refer to Table 9 footnote (b).
(d)Refer to Table 9 footnote (c).
(e)For GCP Card Member receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. GCP delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
(f)The net write-off rate for the current nine month period includes a $37 million partial recovery in Card Member receivables related to a corporate client bankruptcy, which had resulted in a $53 million write-off in the prior year.
Global Merchant and Network Services
Table 15: GMNS Selected Income Statement and Other Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
Nine Months Ended
September 30,
|
|
Change
2021 vs. 2020
|
|
(Millions, except percentages and where indicated)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest revenues
|
|
$
|
1,280
|
|
$
|
997
|
|
$
|
283
|
|
|
28%
|
|
$
|
3,545
|
|
$
|
3,057
|
|
$
|
488
|
|
|
16%
|
|
Interest income
|
|
4
|
|
4
|
|
—
|
|
|
—
|
|
12
|
|
14
|
|
(2)
|
|
|
(14)
|
|
Interest expense
|
|
(24)
|
|
(19)
|
|
(5)
|
|
|
26
|
|
(61)
|
|
(61)
|
|
—
|
|
|
—
|
|
Net interest income
|
|
28
|
|
23
|
|
5
|
|
|
22
|
|
73
|
|
75
|
|
(2)
|
|
|
(3)
|
|
Total revenues net of interest expense
|
|
1,308
|
|
1,020
|
|
288
|
|
|
28
|
|
3,618
|
|
3,132
|
|
486
|
|
|
16
|
|
Provisions for credit losses
|
|
—
|
|
3
|
|
(3)
|
|
|
#
|
|
(37)
|
|
75
|
|
(112)
|