American Express Co at Scotiabank Financials Summit Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Meny Grauman - Scotiabank - Analyst : Maybe the first place to start is just to give you an opportunity to talk a little bit about yourself because I think you have a very interesting background. You joined AMEX in 2018. So maybe, by way of introduction, you can tell us about the journey that brought you to American Express?

Question: Meny Grauman - Scotiabank - Analyst : That's right.

Question: Meny Grauman - Scotiabank - Analyst : No more softballs. Now, it's all hard questions from here. But obviously, American Express, it's hard to think of too many brands that are bigger than American Express, especially in financial services, globally. I want to start off by just getting your perspective on where we are from a macro standpoint. You have great insight to this question, I think, on an enterprise level because you're in charge of credit risk across the enterprise. But obviously, in terms of your focus on the Commercial business, maybe first sticking on the commercial side, and then maybe we can broaden it in terms of how healthy is the commercial side of the economy right now? There's different ways we can cut it. We can talk about the US. We could talk about Canada. But maybe if you could kind of jump into that and give us a little sense of what are you hearing from customers? What are you seeing in the data in terms of how strong the Commercial customer of American Express really is?

Question: Meny Grauman - Scotiabank - Analyst : That's very helpful. I'm wondering if you can provide any insights into Canada specifically, obviously, a big focus for all of us here in the room in terms of what you're seeing in Canada? I mean, one interesting puzzle, and we've talked about this with the big bank CEOs here this morning, is Canadian macro indicators are definitely weaker than in the US, but the business of banking is actually stronger. We're seeing it -- particularly, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 3:50PM, AXP.N - American Express Co at Scotiabank Financials Summit commercial loan growth is a lot more robust in Canada than in the US. So I'm hoping maybe you have some insight into that from your perspective at American Express?

Question: Meny Grauman - Scotiabank - Analyst : I want to get more into the details, but first a few more questions just on the macro maybe, again, focusing on the US, where you have that deep insight. Just in terms of -- can you give us a little bit of insight into travel spend and where it has come back, where it hasn't come back, but more broadly in terms of where you really see demand thriving on the commercial side in the US, maybe on a sectoral basis versus areas where you're seeing more weakness? And is there anything sort of surprising in that picture that you're seeing?

Question: Meny Grauman - Scotiabank - Analyst : I just wanted to mention that Anna will be taking questions from the room, so we'll leave some time at the end. I just wanted to make sure so you can start thinking of good questions. Just wrapping up this discussion on the macro, again, tying it to your overall enterprise-wide credit responsibility, what are you seeing on the consumer side? Is it very similar to the trends you've been talking about on the commercial side? Is there anything different that you would highlight there?

Question: Meny Grauman - Scotiabank - Analyst : I like that, constructive paranoia. Maybe I'll use that.

Question: Meny Grauman - Scotiabank - Analyst : Sounds good. I wanted to dig into the strategy. I mean, you're touching on it here in terms of AMEX focused on driving growth in the commercial market, SME in particular. And so, the question is, what makes it such an attractive opportunity? When we think of SMEs, we tend to think of a lot more risk, I think. Maybe that's the first thing that comes into mind. But what's so attractive here, and why the push in terms of SMEs in particular? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 3:50PM, AXP.N - American Express Co at Scotiabank Financials Summit

Question: Meny Grauman - Scotiabank - Analyst : Just going back to the commentary -- the comments you made on market share gains coming out of the pandemic, I just want to understand that better in terms of -- was it just a coincidence or did the pandemic create some conditions that you were able to really capitalize on and it's not a coincidence that you saw that market share gain in that period? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 3:50PM, AXP.N - American Express Co at Scotiabank Financials Summit

Question: Meny Grauman - Scotiabank - Analyst : To ask about how you think about fee pools in the space and where are the attractive fee pools in terms of segment, geography, and if you kind of go a bit deeper in terms of where you see the real opportunities?

Question: Meny Grauman - Scotiabank - Analyst : That's what I wanted to ask. In terms of going beyond the card, when you think about it, we started talking about fee pools, but I think it's a lot more than just the direct fees that get generated from those ancillary services, like all the other benefits. And so you talked about that statistic on a secondary card, but I'm wondering if there are other benefits as well in terms of -- I don't know if you have any data on retention or on the credit side?

Question: Meny Grauman - Scotiabank - Analyst : I want to ask about interchange fee pressure. It's very much a topic. And so how you deal with that pressure and sort of where you see it going from here? And so just if you could dig a little bit deeper into that important topic?

Question: Meny Grauman - Scotiabank - Analyst : I wanted to ask about sort of that line between the consumer side and the commercial side. I know for a lot of small businesses, depending on the industry, it could be a very fluid line in terms of using a Consumer card really for very much commercial needs. And so, the strategy in terms of REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 3:50PM, AXP.N - American Express Co at Scotiabank Financials Summit pulling from the consumer side to the commercial side, the value proposition of that, and is that a focus? Or are you actually happy with a certain percentage of consumers using their Consumer card really for business needs?

Question: Meny Grauman - Scotiabank - Analyst : I wanted to talk about credit risk. We touched on it, but just maybe first from just a technology point of view and how American Express uses technology to underwrite new business and to manage credit and how that's evolved over time? Anything sort of interesting that you can highlight in terms of how you use technology?

Question: Meny Grauman - Scotiabank - Analyst : And then maybe more broadly, also on the credit risk side, it always struck me, how does American Express manage the risk of no preset spending limits? How does that feature get managed from a credit risk perspective?

Question: Meny Grauman - Scotiabank - Analyst : You have to kill me.

Question: Meny Grauman - Scotiabank - Analyst : I wanted to talk about capital deployment and ask, where are you deploying capital? Geography and sort of any other details you can tell us in terms of the capital focus?

Question: Meny Grauman - Scotiabank - Analyst : You talked about Kabbage, a fintech, so leads me to the question, which is a common question, but I'm curious your perspective at American Express in terms of how you view fintechs at American Express. Are they competitors? Are they partners? Both? How do you see that from a competitive perspective?

Question: Meny Grauman - Scotiabank - Analyst : Room for healthy paranoia on different levels. I think we can open it up to questions. We have a few minutes left. If not, I have one or two that I can still ask, but let's see if there's any questions in the room. Maybe while people are thinking, we'll talk about fraud. You touched on it, but obviously a very important and fascinating topic. I'm curious, given the American Express model, how do you balance security and ease of use? You touched on it a little bit. You definitely don't want to go too far one way or the other. How do you do that effectively?

Question: Meny Grauman - Scotiabank - Analyst : And how does geography play into that? Do you see a big difference between the US versus international? Is the problem worse in the US or outside of the US?

Question: Meny Grauman - Scotiabank - Analyst : I don't know if there's any questions from the room.

Question: Meny Grauman - Scotiabank - Analyst : Right. So, I think that's a good place to end the conversation. Again, I want to thank you so much for taking the time to be with us. And obviously a fascinating discussion. We can talk a lot more, but our time is up. And thanks again.