The company faces risks from macroeconomic conditions (recession, unemployment, inflation), geopolitical instability, legal proceedings (antitrust claims, investigations), competitive pressures, regulatory changes (capital requirements, consumer protection laws), and potential defaults by Card Members. Fluctuations in interest rates, foreign exchange rates, and the performance of securitized assets also pose risks. Merchant acceptance and cobrand relationships are also subject to regulatory scrutiny.
Financial Upside
Strong revenue growth (8% and 9% year-over-year for the three and nine months, respectively), stable billed business, strong new card acquisitions, and excellent credit performance are positive indicators. Increased interest income, driven by growth in revolving loan balances and higher interest rates, is also a positive factor. The sale of Accertify generated a significant gain. The company aims to return excess capital to shareholders through dividends and share repurchases.
