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AmEx (AXP) Complies With RBI Data Rules: Key Market Opens
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American Express Company (AXP - Free Report) recently received a favorable decision from the Reserve Bank of India (RBI), which lifted a ban on onboarding new customers in the country. The RBI lifted the 15-month ban on AmEx after it complied with the data storage policy.
The data storage rules required foreign card issuers and payment networks to store data of domestic payments in India for supervisory access. Following the “satisfactory compliance” from AmEx, the imposed curb was lifted with immediate effect. AmEx has made significant investments in infrastructure, technology and resources in the country to comply with the rules.
Similar moves have been made by companies like Mastercard Incorporated (MA - Free Report) and Discover Financial Services (DFS - Free Report) . These companies were required to store Indian data locally since October 2018 to provide RBI with “unfettered supervisory access”.
The RBI lifted its ban on Mastercard from issuing cards for Indian customers in June 2022. Last November, the central bank removed curbs on Diners Club International, which is a subsidiary of Discover Financial.
Being the second largest country by population in the world, India possesses a massive payments market. Per the RBI data, at the second quarter-end, AmEx had only 1.4 million credit cards in the country, which is 1.7% of the overall cards in circulation. Following the decision from RBI, AmEx can tap on its enhanced infrastructure in the country to capitalize on the growing demand for digital payments.
This decision from RBI will enable AXP to generate more revenues from the country. For the first half of 2022, AmEx’s total revenues, net of interest expense, increased 30% year over year to $25.1 billion on the back of higher Card Member spending. With its new growth plan, the company anticipates gaining heavily from the improving macro environment. Rising credit card spending will boost its future performance. AmEx expects 2022 revenues to grow 23-25% year over year. In the long term, AXP expects to achieve revenue growth of more than 10%.
Price Performances
Shares of American Express have decreased 2.7% year-to-date compared with the 15.7% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Pick
American Express currently has a Zacks Rank #3 (Hold). A better-ranked stock in the broader finance space is Owl Rock Capital Corporation , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in New York, Owl Rock Capital is a specialty finance company that lends funds to U.S. middle market companies. The Zacks Consensus Estimate for Owl Rock Capital’s 2022 bottom line indicates 6.4% year-over-year growth.
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AmEx (AXP) Complies With RBI Data Rules: Key Market Opens
American Express Company (AXP - Free Report) recently received a favorable decision from the Reserve Bank of India (RBI), which lifted a ban on onboarding new customers in the country. The RBI lifted the 15-month ban on AmEx after it complied with the data storage policy.
The data storage rules required foreign card issuers and payment networks to store data of domestic payments in India for supervisory access. Following the “satisfactory compliance” from AmEx, the imposed curb was lifted with immediate effect. AmEx has made significant investments in infrastructure, technology and resources in the country to comply with the rules.
Similar moves have been made by companies like Mastercard Incorporated (MA - Free Report) and Discover Financial Services (DFS - Free Report) . These companies were required to store Indian data locally since October 2018 to provide RBI with “unfettered supervisory access”.
The RBI lifted its ban on Mastercard from issuing cards for Indian customers in June 2022. Last November, the central bank removed curbs on Diners Club International, which is a subsidiary of Discover Financial.
Being the second largest country by population in the world, India possesses a massive payments market. Per the RBI data, at the second quarter-end, AmEx had only 1.4 million credit cards in the country, which is 1.7% of the overall cards in circulation. Following the decision from RBI, AmEx can tap on its enhanced infrastructure in the country to capitalize on the growing demand for digital payments.
This decision from RBI will enable AXP to generate more revenues from the country. For the first half of 2022, AmEx’s total revenues, net of interest expense, increased 30% year over year to $25.1 billion on the back of higher Card Member spending. With its new growth plan, the company anticipates gaining heavily from the improving macro environment. Rising credit card spending will boost its future performance. AmEx expects 2022 revenues to grow 23-25% year over year. In the long term, AXP expects to achieve revenue growth of more than 10%.
Price Performances
Shares of American Express have decreased 2.7% year-to-date compared with the 15.7% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Pick
American Express currently has a Zacks Rank #3 (Hold). A better-ranked stock in the broader finance space is Owl Rock Capital Corporation , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in New York, Owl Rock Capital is a specialty finance company that lends funds to U.S. middle market companies. The Zacks Consensus Estimate for Owl Rock Capital’s 2022 bottom line indicates 6.4% year-over-year growth.