Dive Brief:

• American Express’s “premium” card designation doesn’t always match with potential issuing partners, CEO Steve Squeri said Tuesday at an investor event, responding to a question that alluded to reports that Amex may replace Goldman Sachs as Apple’s credit card partner.
• “The premium card base is one of the biggest impediments,” as far as co-branded partnerships that Amex walks away from, Squeri said Tuesday during an appearance at the Goldman Sachs U.S. Financial Services Conference in New York. “Because sometimes the partner wants to reach into everybody, and that’s just not who we are,” he said.
• He noted successful co-branded credit card partnerships with Delta Air Lines – Amex’s largest partnership – as well as British Airways and hotel companies Hilton and Marriott. However, “there are others that we’ve walked away from, or not engaged with, because of the breadth of their customer base,” Squeri told Goldman Sachs Analyst Ryan Nash, without naming any companies.

Dive Insight:

Amex has been mentioned by some analysts as a potential suitor for the Apple card partnership, as the tech giant reportedly seeks to end its partnership with bank Goldman Sachs. 

The Wall Street Journal reported in June that Amex was in talks to pick up the partnership, although the publication said last week Amex expressed concern about aspects of the credit card program, including its loss rates. The company has declined to comment.

Nash noted “several articles that cited you as a potential candidate to take over a card partnership from another large financial institution,” without naming companies. He asked Squeri to talk about his interest in adding co-branded partnerships and what Amex looks for when it does bid on card partnerships, as well as what the biggest impediments have been when Amex has passed on such partnerships.

“When we look at co-brand partnerships – and we have over 50 co-brand partnerships –  you’re really looking for one plus one equals three,” Squeri said. 

That means “great value propositions” when the two companies come together, he said. Amex also considers whether it can target premium customers and achieve better distribution.

“Because that’s what you want a co-brand partnership for, is the distribution, as well,” Squeri said. “And does it add value to both brands? And do you create premium economics? So, as we evaluate partnerships, that’s the lens that we use.” 

In recent years, Amex has doubled down on the premium card space with its annual fee products. And because Amex’s product mix today includes more premium offerings than it did pre-pandemic, the company’s credit metrics have benefited, executives have said. Amex has seen a slower pace of normalization in delinquencies and charge-offs than many of its peers.

Keefe, Bruyette & Woods Analyst Sanjay Sakhrani, who follows the card industry, last week mentioned Amex as a possible Apple card suitor. He mentioned JPMorgan Chase or Synchrony Financial as possible Apple partners.

Another analyst, Oppenheimer & Co. Analyst Dominick Gabriele, said in a Nov. 30 email that Amex probably isn’t the right fit for Apple. He also said Synchrony could be interested in the Apple card partnership, and named Capital One or Bread as other possible suitors.