JPMorgan, Citi, Wells See Strong Credit Card Growth In Q3

Credit Card Results

In third-quarter earnings, credit card results at Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co. were a highlight. Nomura’s Bill Carcache noted that card performance was a “bright spot” and pointed out that he’s more bullish on card issuers than banks, Bloomberg reported.

JPMorgan was the leader of the group. It had the quickest rate of growth at 8.1 percent year-over-year. And Citigroup’s Citi-branded card experienced the largest sequential improvement with a 100 basis point rise to 3.1 percent even as credit quality continued to normalize and purchase volume growth decelerated.

Evercore ISI’s Glenn Schorr wrote that Citigroup’s “Branded Card was a standout in the quarter” with revenue growth that almost doubled. He noted that may receive attention as investors were contending with the decision of Citi to “grow the promo bucket a bit more recently.”

Sandler O’Neill’s Christopher Donat, however, noted that that “deceleration for debit and credit card spending growth has very small negative implications for U.S. activity of card networks” Visa and Mastercard.

Mastercard shares increased by as high as 1.3 percent per the report. Visa Inc.’s shares rose by as much as 1.2 percent to the highest as of Sept 10. Bank stocks, too, rallied, and the report said that JPMorgan was the “undisputed leader” in a busy beginning to bank earnings. Wells Fargo rose by as high as 4 percent, while Citigroup increased by as great as 2.6 percent.

The news comes as JPMorgan Chase and Co. reported results that showed consumer spending remains resilient in the face of worldwide macro pressures. Its card loans are up high single digits — which, shows continued traction in mobile banking and digital efforts at a company level.

Headline numbers released by JPMorgan on Tuesday (Oct. 15) show that earnings per share came in at $2.68, coming out ahead of expectations by 23 cents. The consolidated top line grew by 8 percent to $29.3 billion and beat the Street at $28.5 billion.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.