American Express reported third-quarter net income of $3,712 million, up 28 percent from $2,902 million in the same quarter last year, as discount revenue climbed 8 percent and provisions for credit losses fell 23 percent. The company did not issue forward guidance in the filing.
Discount revenue, the largest revenue stream, reached $10,169 million in Q3’26, compared with $9,413 million in Q3’25. Net card fees grew faster, rising 16 percent to $2,969 million from $2,551 million. Total non-interest revenues climbed 8 percent to $15,122 million. Net interest income expanded 10 percent to $4,940 million as interest on card balances rose 7 percent to $6,387 million, while interest expense fell 10 percent to $1,918 million as deposit costs declined 9 percent.
Year-to-date through Q3’26, net income attributable to common shareholders reached $9,663 million, up 17 percent from $8,272 million in the same nine-month period of 2025. Total revenues net of interest expense and provisions climbed 12 percent to $55,286 million. Diluted earnings per share rose 20 percent to $14.22 for the nine-month period, compared with $11.85 last year.
What it means
The earnings acceleration outpaced revenue growth, driven by two structural shifts. First, credit quality improved sharply: provisions for card credit losses fell to $895 million from $1,220 million year-over-year, a 27 percent decline that suggests either tighter underwriting, lower delinquency rates, or both. The company’s filing does not specify which. This credit benefit alone accounts for roughly half the earnings beat, since the provision line moved faster than revenues.
Second, the company’s funding costs compressed. Deposit interest expense fell 9 percent despite customer deposits rising 3 percent to $155,019 million, indicating either a shift in deposit mix toward lower-cost products or a lag in rate repricing as the Federal Reserve began cutting rates in September 2024. Long-term debt interest also fell 11 percent. This funding advantage is temporary: as deposit rates reset downward, the margin benefit will fade unless card yields rise or volumes accelerate further.
Card balances grew 8 percent to $233,153 million, matching network volume growth of 8 percent, suggesting the company is not gaining share through volume alone. Billed business (the broadest measure of card spending) also grew 8 percent. The company’s return on average equity reached 42.4 percent in Q3’26, up from 35.9 percent in Q3’25, but this metric is inflated by the credit provision benefit and lower funding costs. The honest open question is whether the credit improvement is cyclical (a temporary reprieve in consumer health) or structural (tighter risk management). The filing provides no forward guidance on provisions, credit losses, or loan growth, leaving visibility into normalized profitability unclear.
Operating expenses rose 9 percent to $14,546 million, in line with revenue growth. Card member services costs jumped 36 percent to $2,006 million year-over-year, the largest expense acceleration, though the filing does not explain the driver. Salaries and benefits rose 15 percent, outpacing revenue growth and suggesting wage pressure or higher headcount.
What to watch
The next quarterly earnings release will reveal whether credit provisions normalize or remain depressed, and whether deposit funding costs begin to rise as rate cuts persist. Watch for management commentary on card member services cost inflation and any forward guidance on loan growth or credit losses. The company’s capital ratios remain well above regulatory minimums, with Common Equity Tier 1 at 10.9 percent, leaving room for increased shareholder returns if earnings sustain.
Source: the company’s 8-K filed 2026-10-23 with the SEC.
For the standing yardsticks on American Express: the price tag, the filed record, and the four gauges, refreshed with each edition, see the BullScope Evidence Sheet: American Express.
