Deutsche Bank shares soar in third-quarter card spending surge

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Deutsche Bank shares soar in third-quarter card spending surge

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Card spending accelerated from pre-pandemic levels and the company signed more customers than ever for the premium product, helping overall revenue top analysts estimates in the third quarter. The refreshed card comes with a bevy of new perks, including access to private jets and additional statement credits - along with a higher annual price tag of $695.

The strategic investments we ve made over the past year, particularly those to attract new millennial and Gen Z customers and expand our leadership position with small businesses, are helping fuel the strong momentum we re seeing in spending, customer acquisition, engagement, and retention, Chief Executive Officer Steve Squeri said in a statement announcing the results.

AmEx shares surged 4.4% to $185.27 at 9: 51 a.m. in New York. They grew 53% this year, more than the 37% increase in the S&P 500 Financials Index.

The company was severely affected by the Covid - 19 pandemic, which severely curtailed spending on the firm s cards. As consumers have begun returning to traveling and dining out, AmEx has benefited. Spending on the firm s cards soared 31% to $280.4 billion in the quarter, beating the $273.6 billion average of analysts estimates compiled by Bloomberg.

That s boosted overall discount revenue, or the fees merchants pay to the credit card giant when consumers swipe their cards at checkout. Such revenue climbed 34% to $6.68 billion, higher than the $6.44 billion average of analyst estimates compiled by Bloomberg.

With the higher card spending came additional costs for the company. Total expenses jumped 29% to $8.67 billion, higher than analysts expected.

The firm expects to earn $8.85 to $9.25 a share next year - guidance it originally set for its performance in 2020 before business was hamstrung by the pandemic - - and AmEx reiterated Friday that 2022 earnings are likely to be at the high end of that range.

Last year, as unemployment soared, AmEx set aside billions of dollars to cover potential losses. But massive government stimulus has allowed the card giant and many of its rivals to largely avoid losses, leading to unprecedented reserve releases this year.

AmEx said on Friday that it released $393 million of loan-loss reserves. That helped increase overall earnings to $1.83 billion in the three months through September.

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