Amex results reveal spending trends under Omicron

Payments company American Express reveals the extent of its customers adaptation to the pandemic and the signs that COVID-19 is becoming endemic.

The results

• It was a positive quarter for the payments firm, with profits up by a fifth and the confidence to advise investors that revenues would be up between 18% and 22% over the course of 2022, on the back of ‘record’ spending.
• Non-entertainment goods spending (exc. travel and entertainment) which is typically the vast majority of spending was up 24% on 2019.
• Travel bookings are looking promising, up 44% on pre-pandemic levels.

What it tells us

Unlike the shocks of the early pandemic, Amex’s customer base have shown they are “learning to adapt their personal and business lives to reality of the pandemic,” vice chairman and CFO Jeff Campbell told the FT, adding that it suggested a “cusp” between the pandemic and the virus becoming endemic.

In part, Amex puts this down to less severe peaks and troughs at times of high virus case rate, such as the recent wave of Omicron, suggesting that without lockdown restrictions most of its customers are likely to try to get on with their lives. In the future, this effect is expected to continue.

 Key quote

“Our investment strategy enabled us to reach record levels of Card Member spending, maintain customer retention and satisfaction above pre-pandemic levels, increase new Card acquisitions, grow our loan balances, and deepen our digital engagement with customers, producing revenue growth of 30 percent in the fourth quarter and 17 percent for the full year” – Stephen J. Squeri, chairman and chief executive officer, American Express, in a statement.

Sourced from American Express, Financial Times. [Image: Amex]