The news: American Express’s card business hasn’t shown cause for concern despite recent speculation of an economic downturn, CEO Steve Squeri said during the Bernstein Strategic Decisions Conference last week.
Squeri said based on Q1 results, credit card delinquencies and charge-offs are still under 1%, and the company expects those metrics will remain below pre-pandemic levels through 2022. Based on economic forecasts, he expects inflation will normalize in 2023 and noted that many economists aren’t anticipating a recession in the US.
Key context: Several factors, including persistently high inflation and Big Tech turmoil, have led to widespread market uncertainty.
Amex’s approach: While Squeri acknowledged current market circumstances, he said that from a consumer spending perspective, things are going well for Amex.
Despite not being a focus, Amex still acquired more than 1 million cards per quarter, according to Squeri. Since then, Amex has focused on encouraging customer spend by launching and revamping cards. In terms of cardholder spending, Amex’s positioning in the card market may have been an advantage for the company compared with other issuers: It offers several premium and co-brand cards.
The big takeaway: Squeri is confident in Amex’s overall performance and believes the company is well-positioned for growth despite current market uncertainty.
His comments reflect those of Bank of America CEO Brian Moynihan, who in April said consumer spending remains robust despite inflation. But JPMorgan CEO Jamie Dimon recently painted a different picture, warning that an “economic hurricane” could be on the horizon due to market trends.
Go deeper: Check out the “Era of Uncertainty” report to understand how recent global trends and events are affecting businesses and what can be expected in the future.