Mihir Bhatia

Doubles declined to speculate but reiterated that price controls create unintended consequences and restrict credit.

Wenzel emphasized surplus capital generation and the reclassification of capitalized software adding about 80bps of CET1.

Wenzel confirmed CET1 not binding, still has room relative to targets. Multiple factors determine pacing: business performance, expected RWA growth, regulatory environment, and rating agencies. Earnings power generates roughly 350 basis points of CET1 year over year. Will be aggressive but prudent and not drop immediately to target levels.

Wenzel expects average active accounts to invert by mid-2026 as 15% new account growth drives engagement. Loyalty cost increase reflects enhanced value propositions on certain cards plus natural byproduct of new portfolio seasoning, new accounts drive more in-store spend which has higher partner value prop. Co-branded volume up 20% naturally increases loyalty costs.

Wenzel confirmed approaching day-one CECL reserve levels. Downward bias on rate if macro stabilizes and qualitative overlays can ease. On dollar basis, growth will push reserves higher even as rate declines. Unemployment assumption at 4.8% by year-end. Qualitative overlays maintained at consistent levels. Trajectory depends on delinquency formation and macro environment.

Doubles confirmed no cannibalization of private label or co-brand across all partners where multiproduct strategy is deployed. Pay Later attracts new customer base that can be offered other products over time. This was the key question from partners when strategy launched and has been clearly validated.

Wenzel explained reserve release driven primarily by credit outperformance, strong entry rates, stabilized early-stage delinquencies. Moody's August baseline slightly better than May. Macro QA overlay held consistent. Q4 reserve dollar post should reflect asset growth but with less seasonal build than prior year. Long-term downward bias on reserve rate as unemployment assumptions normalize.

Wenzel confirmed new accounts up 10% sequentially and YoY. Average active accounts inflected sequentially in Q3. Q4 credit actions include acquisition-related unwinds. Holiday reengagement of inactive accounts expected. Walmart, Amazon Pay Later, and PayPal modifications will add to active accounts going forward.

Doubles described fully embedded digital experience in OnePay app, general purpose and private label cards, strong value prop, and good placement commitments. Expected to be top 5 program. Wenzel added loss content will be significantly less than 10% from prior program given de novo book advantage, and value proposition significantly stronger.

Wenzel confirmed loan growth has troughed at -2%, expect to reach flat by year-end with seasonal holiday build. Doubles added new program launches, product launches, and credit box opportunities give confidence in 2026 growth return.

Doubles differentiated between market uncertainty and actual consumer behavior, spend levels still strong, credit better than expected, labor market strong. Lower-income tapering driven by inflation, higher-income flat, affluent segment grew 1%. Wenzel unpacked April weekly data: three platforms had upticks from seasonal, partner campaign, and Easter, no tariff pull-forward detected.

Doubles emphasized discipline around partner alignment, deal structure, and 10-year stress modeling. Highlighted recent renewals including Sam's Club and JCPenney. Wenzel added 10-K revenue-under-contract disclosure now in high-80s% for beyond 2027, continuing to make progress.

Wenzel provided comprehensive view: broad credit actions ceased Q2 2024, line utilization stable, minimum payment rates up structurally from installment lending, not from consumer stress.

Wenzel confirmed slightly ahead of repricing schedule but declined to provide incremental detail beyond prior disclosure.

Andrew ruled out any one-off; Rich flagged that June delinquencies moved in line with rather than better than seasonality.

Rich gave a full leading-indicator walk covering payment rates, revolve rates, vintage performance and the recoveries inventory taper.

Rich confirmed debit conversion complete, reinforced belief in doability. Card origination testing underway, credit card back book conversion first half 2027. Andrew clarified expense synergies backloaded to conversion completion, revenue synergies ramping now. Full $2.5B synergies by mid-2027.

Andrew attributed $80M+ reserve build to a small number of specific credits in C&I. Characterized as normal lumpiness. No systemic concern. Direct and reassuring.

Rich confirmed debit migration nearly complete with smooth conversion, good customer take-up, results meeting or exceeding expectations. Credit card origination on Discover network by mid-2026, existing card migration beginning early 2027. Significant testing agenda planned. Building technology solutions to ease consumer card transitions. Longer-term acceptance and brand building needed for heavier spender migration.

Rich detailed resilience levers: stressed underwriting buffers, capital buffers, balance sheet flexibility from consumer pullback in recessions, marketing flexibility (though top-of-market investments like lounges are more fixed), and product structure levers. Noted differences from last recession: no longer off-balance-sheet assets, now under CECL. Jeff Norris added tech transformation enables faster, more granular monitoring and ML-driven anomaly detection.

Andrew explained three factors constraining near-term buybacks: regulatory pre-approval, need for combined company capital assessment, and Fed approval to return to SCB framework.

Andrew identified key NIM drivers: Q1 day-count headwind (-15bps), modest asset sensitivity headwind, yield curve steepening tailwind, and card mix shift as the single biggest structural tailwind.

CFO declined to guide billings, saying momentum should continue but flagging about a 1% headwind from the two small business portfolio transfers.

Le Caillec said incremental marketing goes to new card acquisition. Pre-ranked investment opportunities are funded as capacity frees up. Returns expected to be very strong.

Squeri cited continuing platinum value extraction, international coverage growth, commercial digital capabilities, and Resy/Tock integration as 2026 priorities.

Le Caillec said welcome incentives are the largest and most variable component, with constant tension between deploying more dollars and ensuring strict return criteria.

Le Caillec said competition expands the addressable market, allowing AXP to deploy more marketing at attractive returns since prospects inevitably consider Platinum.

Squeri confirmed natural hedges in rewards plus large flex in marketing and OpEx, but reiterated they won't cut investments just to hit an EPS number.

Squeri dismissed fintech consumer threat, saying AXP customers value experiences and service over cashback, with consumer card acquisition at record levels.

Ron said the MasterCard partnership is tracking better than expected, with 10 FIs closed and 100 active in the pipeline, though FI sale cycles are longer.

Ron expects a big monetization step-up next year, with the enhanced linked-account product due out of development in Q4.

Ron identified two 2026 revenue contributors: payables monetization expansion (have clients, merchants, money moving already) and Alpha consolidation/synergies. Longer-term items: Mastercard FI channel opportunity and international bank account expansion due to longer sales cycles.

Ron identified two lessons: original thesis of converting European users to network didn't work as well as Brazil, but Corpay tripled profits and selling for 50% more than purchase price. Reminder that even imperfect thesis can generate returns through operational excellence.

Ron emphasized the business is just better today with two biggest businesses growing double digits. Upside from Corporate Payments where Mastercard pipeline and new channels are incremental. Goal is not to get over skis; will be more precise in 90 days. Exit rate of $5.70 and $5.90 implies strong 2026 entry.

Ron said don't read as abnormal; will do more large enterprise transactions. Normal book pricing unchanged. Monetization rates may inch up in 2026 from ACH additions and debit card as alternative to virtual card. Breaking out large deals for transparency.

Ron framed stablecoin as new rail alongside traditional swift. Biggest edge: 24/7 availability outside banking hours. Opportunity in on/off-ramp bridging between fiat and digital. Only 3-5% of revenue tied to rails cost, so economic impact is de minimis.

Sebastian said the card shows healthy day-to-day debit usage, not just financing, plus high-teens growth in mature Sweden.

Niclas attributed the provision increase to fast book growth with costs taken upfront and revenue over the loan life.

Max said Fiserv (following FIS) lets Affirm offer BNPL debit capability to banks via their core banking software providers.