Tens of billions of dollars of credit card receivables were slated for disposal during the crisis, and though
But while mergers and acquisitions have lately not been the protean force in cards that they have
American Express Co.'s multifaceted businesses — which include its payments network, merchant acquiring and lending — have taken it far afield. Recent deals include
Amex intends to pay out about 50% of earnings to shareholders, CEO Kenneth Chenault said during a presentation in December, creating a balance with "what we do from a bolt-on acquisition standpoint."
Chenault said he could "never say never" about a blockbuster transaction, but that he does not anticipate a transformational deal in the company's core cards business. He held up Amex's
Likewise, smaller quarry is more probable in the "fee services, rewards, and loyalty" spheres since such companies are generally smaller. (Amex's goal is to increase revenues from "fee services" businesses like the rewards program it runs for Delta Air Lines Inc. by more than threefold from 2009 to $3 billion in five years.)
Chenault said Amex does not expect alternative payments — which includes business lines like online and mobile payments and prepaid cards — to "contribute materially to our revenue growth next year, but we do expect to make tangible progress in building the capabilities and relationships we'll need." And, he said, "You should expect us to use our balance sheet to accelerate our efforts through both acquisitions and partnerships."
In a presentation in November, Discover Financial Services President Roger Hochschild said his company's preference is to "deploy excess capital" through faster organic growth. But Discover is making a big stride in its effort to build its noncard consumer lending businesses through its
Capital One Financial Corp. has said that when it cut back on marketing during the recession (people were not borrowing regardless), it shifted resources into building up private-label and cobrand card capabilities, and the backbone for its retail banking operations.
Now Capital One is shopping for banks and card portfolios (it picked up $800 million of receivables in the third quarter as a part of a deal with Sony Corp., one of four new partnerships recently), and CEO Richard Fairbank has said pricing conditions are more favorable than they have been in the 22 years since he helped found the company.
In keeping with the three bank deals through which it has fused a $119 billion-deposit franchise with its national lending businesses, Capital One has said that geographic contiguity is not important to it because of its widely recognized brand.
In a November presentation, Fairbank also said that the company used the integration of its
Nonetheless, in a different presentation in November, Capital One Treasurer Stephen Linehan said, "Let's be honest, unless you get much better GDP growth, I think organic growth is going to be a … slog."
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