Amazon and Lowe's: The Partners Amex Let GoNarrow moat

American Express (AXP) — moat facet

American Express chose to let its Amazon and Lowe's small-business cards go, and pays for the discipline with a year of slower interest income.

Not every departure is a loss American Express resists. Its 2025 annual report says it "may not renew certain relationships, such as our Amazon and Lowe's small business cobrand portfolios, which, as previously disclosed, have been reclassified to held for sale"1.

Card balances held for sale ($M)2,457Dec 20251,752Jun 2026American Express Q4 2025 and Q2 2026 statistical supplements
The exits are under way.

The held-for-sale card balances were $2,457 million at the end of 20252 and $1,752 million in June 20263, after the exit of one of the portfolios in the second quarter4. On the call the finance chief said the Amazon portfolio would move in the third quarter, with an impact on net interest income of about two and a half percent until it is lapped5.

The exits slow spending too. The 10-Q says: "We expect a moderation in spend growth as we exit small business cobrand held-for-sale portfolios"6. Commercial Services billed business grew 5% in the second quarter of 20267, the slowest of the three card segments.

Choosing to let these go fits the Costco lesson: Amex would rather lose a portfolio than renew it on terms that do not pay. It also shows the power of large partners. A retailer with its own customer base can take its card to another issuer, and the cardholders follow the retailer, not the network.

The cost to earnings was said to be small. According to a third-party summary of the second-quarter call, the portfolio transfers reduced net interest income growth but had negligible earnings impact because the headwind had already been built into guidance8. The company kept its earnings guidance of $17.30 to $17.90 a share for 20269.

These portfolios are small against the whole. $2,457 million of held-for-sale balances was under 2% of the $151,832 million of Card Member loans at the end of 20251011. The figure to watch is net interest income growth after the transfers are lapped; NII rose 11% in the second quarter of 202612, and growth that fell below 5% once the exits were complete would mean the portfolios had been doing more work than their size suggested.

Moat trajectory: Holding steady

Held-for-sale balances $2,457M (Dec 2025) to $1,752M (June 2026); NII headwind about 2.5% until lapped.

The number that tests this moat
Reported
Card balances held for sale, latest quarter
$1,752M (June 2026), from $2,457M (Dec 2025)

The exiting portfolios; NII growth below 5% once they are gone would mean they mattered more than their size.

Source: American Express Q2 2026 statistical supplement ↗
References
  1. ReportedIts 2025 annual report says it "may not renew certain relationships, such as our Amazon and Lowe's small business cobrand portfolios, which, as previously disclosed, have been reclassified to held for sale".
    American Express Form 10-K for fiscal 2025 - Delta, cobrand partners and partnership concentration. — FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedThe held-for-sale card balances were $2,457 million at the end of 2025 and $1,752 million in June 2026, after the exit of one of the portfolios in the second quarter.
    American Express fourth-quarter 2025 statistical supplement, Form 8-K exhibit 99.2 - card metrics, billed business by segment, balance sheet and the definition of variable customer engagement costs. — Q4 2025 · publ. 30 January 2026 · source ↗
  3. ReportedThe held-for-sale card balances were $2,457 million at the end of 2025 and $1,752 million in June 2026, after the exit of one of the portfolios in the second quarter.
    American Express second-quarter 2026 statistical supplement, Form 8-K exhibit 99.2 - segment results, card metrics, capital and credit - consolidated results, card metrics, capital and credit. — Q2 2026 · publ. 24 July 2026 · source ↗
  4. ReportedThe held-for-sale card balances were $2,457 million at the end of 2025 and $1,752 million in June 2026, after the exit of one of the portfolios in the second quarter.
    American Express Form 10-Q for the quarter ended 30 June 2026 - capital return, held-for-sale cobrand portfolios, discount revenue drivers and the Millennial and Gen-Z cohort. — Q2 2026 · publ. 24 July 2026 · source ↗
  5. Third-party estimateOn the call the finance chief said the Amazon portfolio would move in the third quarter, with an impact on net interest income of about two and a half percent until it is lapped.
    American Express second-quarter 2026 earnings call transcript (third-party transcript). — Q2 2026 · publ. 24 July 2026 · source ↗
  6. ReportedThe 10-Q says: "We expect a moderation in spend growth as we exit small business cobrand held-for-sale portfolios".
    American Express Form 10-Q for the quarter ended 30 June 2026 - capital return, held-for-sale cobrand portfolios, discount revenue drivers and the Millennial and Gen-Z cohort. — Q2 2026 · publ. 24 July 2026 · source ↗
  7. ReportedCommercial Services billed business grew 5% in the second quarter of 2026, the slowest of the three card segments.
    American Express second-quarter 2026 statistical supplement, Form 8-K exhibit 99.2 - segment results, card metrics, capital and credit - segment revenue, pretax income and billed business. — Q2 2026 · publ. 24 July 2026 · source ↗
  8. Third-party estimateAccording to a third-party summary of the second-quarter call, the portfolio transfers reduced net interest income growth but had negligible earnings impact because the headwind had already been built into guidance.
    American Express second-quarter 2026 earnings call transcript (third-party transcript). — Q2 2026 · publ. 24 July 2026 · source ↗
  9. ReportedThe company kept its earnings guidance of $17.30 to $17.90 a share for 2026.
    American Express second-quarter 2026 earnings release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 24 July 2026 · source ↗
  10. Reported$2,457 million of held-for-sale balances was under 2% of the $151,832 million of Card Member loans at the end of 2025.
    American Express fourth-quarter 2025 statistical supplement, Form 8-K exhibit 99.2 - card metrics, billed business by segment, balance sheet and the definition of variable customer engagement costs. — Q4 2025 · publ. 30 January 2026 · source ↗
  11. Moat Explorer calc$2,457 million of held-for-sale balances was under 2% of the $151,832 million of Card Member loans at the end of 2025.
    Moat Explorer calculation from American Express's reported figures ($ millions unless stated). Incentives (variable customer engagement costs = Card Member rewards + business development + Card Member services): 2021 11,007 + 3,762 + 1,993 = 16,762; 2022 14,002 + 4,943 + 2,959 = 21,904; 2023 15,367 + 5,657 + 3,968 = 24,992; 2024 16,599 + 5,886 + 4,782 = 27,267; 2025 18,409 + 6,457 + 6,057 = 30,923; Q2 2026 5,051 + 1,755 + 1,949 = 8,755; Q2 2025 7,508. As a share of discount revenue: 16,762 / 24,563 = 68.2%; 21,904 / 30,739 = 71.3%; 24,992 / 33,416 = 74.8%; 27,267 / 35,192 = 77.5%; 30,923 / 37,401 = 82.7%; Q2 2026 8,755 / 10,163 = 86.1%; Q2 2025 7,508 / 9,361 = 80.2%. Discount revenue left after incentives: 24,563 - 16,762 = 7,801; 30,739 - 21,904 = 8,835; 33,416 - 24,992 = 8,424; 35,192 - 27,267 = 7,925; 37,401 - 30,923 = 6,478; Q2 2026 10,163 - 8,755 = 1,408; Q2 2025 9,361 - 7,508 = 1,853. Incentives / total revenue 16,762 / 42,380 = 39.6%; 30,923 / 72,229 = 42.8%. Incentive growth 30,923 / 16,762 - 1 = 84%; 30,923 / 27,267 - 1 = 13.4%. Discount revenue growth 37,401 / 24,563 - 1 = 52%; 37,401 / 35,192 - 1 = 6.3%. Rewards 18,409 / 11,007 - 1 = 67%; rewards / discount revenue 11,007 / 24,563 = 44.8%; 14,002 / 30,739 = 45.6%; 15,367 / 33,416 = 46.0%; 16,599 / 35,192 = 47.2%; 18,409 / 37,401 = 49.2%. Business development 6,457 / 3,762 - 1 = 72%; / discount revenue 3,762 / 24,563 = 15.3%, 6,457 / 37,401 = 17.3%. Card Member services 6,057 / 1,993 = 3.04 times (+204%); 6,057 / 1,392 = 4.35; growth 3,968 / 2,959 - 1 = 34.1%; 4,782 / 3,968 - 1 = 20.5%; 6,057 / 4,782 - 1 = 26.7%; 6,057 / 2,959 = 2.05. Card Member services / net card fees 1,993 / 5,195 = 38%; 3,968 / 7,255 = 55%; 6,057 / 9,993 = 61%; Q2 2026 1,949 / 2,862 = 68%. Membership Rewards liability 16.5 billion / equity 33,474 = 49%; URR +1 point = 4 x 229 = 916. Card fees: 9,993 / 4,042 = 2.47 (+147%); 9,993 / 5,195 - 1 = 92%; growth 6,070 / 5,195 - 1 = 16.8%, 7,255 / 6,070 - 1 = 19.5%, 8,449 / 7,255 - 1 = 16.5%, 9,993 / 8,449 - 1 = 18.3%; added 9,993 - 8,449 = 1,544. Share of revenue 4,042 / 43,556 = 9.3%; 5,195 / 42,380 = 12.3%; 7,255 / 60,515 = 12.0%; 9,993 / 72,229 = 13.8%. Average fee per card 131 / 58 = 2.26; 117 / 103 - 1 = 14%. Proprietary cards 86.6 / 70.3 - 1 = 23%. Marketing 6,252 / 12.5 million new cards = about $500; 6,252 / 1,544 = 4.0. Card fees plus net interest income (9,993 + 17,364) / 72,229 = 38%. Spending per card 23,496 / 20,392 - 1 = 15.2%; 24,059 / 23,496 - 1 = 2.4%; 24,608 / 24,059 - 1 = 2.3%; 25,453 / 24,608 - 1 = 3.4%. Billed business 1,669.8 / 1,070.5 - 1 = 56%; 1,669.8 / 1,550.9 - 1 = 7.7%; 870.7 / 1,070.5 - 1 = -18.7%. Network volumes 1,897.0 / 1,265.7 - 1 = 50%; 1,897.0 - 1,669.8 = 227.2. Merchant rate 2.51% - 2.24% = 0.27 points x 1,669.8 billion = about 4.5 billion; 4.5 / 37.4 = 12%. Pretax income 13,795 - 10,689 = 3,106. Revenue mix 2019: discount 26,167 / 43,556 = 60.1%; net interest income 8,620 / 43,556 = 19.8%; 2025: 37,401 / 72,229 = 51.8%; 17,364 / 72,229 = 24.0%. Net interest income 17,364 / 7,750 = 2.24; 17,364 / 8,620 - 1 = 101%; +100bp +19 / 17,364 = 0.1%. Card Member loans 151,832 / 87,400 - 1 = 74%. Held for sale 2,457 / 151,832 = 1.6%. Revenue 2020 36,087 / 43,556 - 1 = -17%. Deposits 152,488 / 210,300 = 72.5%; 156,973 / 152,488 - 1 = 2.9%. Delta: 13% x 1,669.8 = 217 billion; 8.2 billion / net income 10,833 = 76%; 8.2 / net card fees 9,993 = 82%; 8.2 / 7.4 - 1 = 11%. Other cobrands 26% - 13% = 13% x 1,669.8 = 217; proprietary 74% x 1,669.8 = 1,236. Valuation: market value 206.30 / 254.84 - 1 = -19%; P/E 206.30 / trailing net income 11.446 = 18.0; P/S 206.30 / 75.95 = 2.72; end-2025 254.84 / 10.833 = 23.5; end-2015 68.45 / 5.163 = 13.3; earnings yield 1 / 23.5 = 4.3%. Trailing twelve months to June 2026: revenue 72,229 + 38,544 - 34,823 = 75,950; net income 10,833 + 6,082 - 5,469 = 11,446; EPS 15.38 + 8.81 - 7.71 = 16.48. Diluted shares 696 / 1,003 - 1 = -30.6%. Net income 10,833 / 5,163 = 2.10; EPS 15.38 / 5.05 = 3.05. Berkshire 151.61 million / 675 million = 22.5%; 13F shares 1,149,942 + 149,061,045 + 1,399,713 = 151,610,700, value 388,967,882 + 50,419,898,471 + 473,452,922 = $51.28 billion (30 June 2026). Card balances consumer 144,974 / 218,054 = 66%. Card fees / discount revenue 9,993 / 37,401 = 27% (2025), 4,042 / 26,167 = 15% (2019). Marketing plus incentives 6,252 + 30,923 = 37,175. Provisions / net interest income 5,256 / 17,364 = 30%. Card Member loans growth 139,674 / 125,995 - 1 = 11%; 151,832 / 139,674 - 1 = 9%; billed business 1,550.9 / 1,459.6 - 1 = 6%. Price to book 305.50 / 48.42 = 6.3. Receivables 62,031 / (151,832 + 62,031) = 29%. GMNS Q2 2026 pretax 1,128 / 1,054 - 1 = 7%. Dividend yield 3.80 / 305.50 = 1.2%. Discount revenue at the 2013 rate 2.51% x 1,669.8 = 41.9 billion; each basis point of rate 0.0001 x 1,669.8 billion = 167 million (5bp 835, 10bp 1,670). Merchant locations at the start of 2026 about 190 - 20 = 170 million. Card Member services growth 2021-2025 +204% against net card fees +92%. A 2020-sized fall today: 18.7% x 1,669.8 = about 312 billion. Revenue outside the United States (7,073 + 5,218 + 4,194) / 72,229 = 23%. 2026 revenue guidance 72,229 x 1.10 = 79,452. Segments (2025, $ millions): revenue 34,814 + 16,926 + 13,000 + 7,759 = 72,499; less Corporate and Other 270 = 72,229. Shares of segment revenue: USCS 34,814 / 72,499 = 48.0%; CS 23.3%; ICS 17.9%; GMNS 10.7%. Pretax income 6,810 + 3,668 + 1,603 + 3,968 = 16,049; shares USCS 42.4%, CS 22.9%, ICS 10.0%, GMNS 24.7%. Pretax margins: USCS 6,810 / 34,814 = 19.6% (2020 3,103 / 16,347 = 19.0%; 2021 5,958 / 18,922 = 31.5%; 2022 5,400 / 23,914 = 22.6%; 2023 5,433 / 28,116 = 19.3%; 2024 6,377 / 31,427 = 20.3%); CS 3,668 / 16,926 = 21.7% (2020 1,013 / 9,234 = 11.0%); ICS 1,603 / 13,000 = 12.3% (2020 521 / 6,742 = 7.7%; 2021 929 / 7,435 = 12.5%; 2022 578 / 9,061 = 6.4%; 2023 973 / 10,430 = 9.3%; 2024 1,031 / 11,461 = 9.0%); GMNS 3,968 / 7,759 = 51.1% (2020 1,294 / 4,309 = 30.0%; 2021 1,874 / 5,129 = 36.5%; 2022 2,954 / 6,475 = 45.6%; 2023 3,656 / 7,396 = 49.4%). ICS pretax 1,603 / 1,031 - 1 = 55%. GMNS 2024 excluding the Accertify gain 4,398 - 531 = 3,867; 3,968 / 3,867 - 1 = 2.6%. Revenue 2020 to 2025: USCS 34,814 / 16,347 = 2.13; CS 16,926 / 9,234 = 1.83; ICS 13,000 / 6,742 = 1.93; GMNS 7,759 / 4,309 = 1.80. 2020 segment total 16,347 + 9,234 + 6,742 + 4,309 = 36,632; USCS share 16,347 / 36,632 = 44.6%. USCS Q2 2026 pretax 2,065 / 1,676 - 1 = 23%. Regions 2025: pretax 13,054 + 1,255 + 831 + 907 = 16,047; United States 13,054 / 16,047 = 81%; 13,054 / consolidated 13,795 = 95%; outside the United States (1,255 + 831 + 907) / 16,047 = 19%; revenue 56,015 / 72,229 = 78% - card fees, spending, lending, funding, valuation, Delta and per-share arithmetic. — 2013-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in American Express's Forms 10-K, 10-Q, earnings releases and statistical supplements, Delta Air Lines' Form 10-K and market data; operands shown in the source line.
  12. ReportedThe figure to watch is net interest income growth after the transfers are lapped; NII rose 11% in the second quarter of 2026, and growth that fell below 5% once the exits were complete would mean the portfolios had been doing more work than their size suggested.
    American Express second-quarter 2026 earnings release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 24 July 2026 · source ↗
Sources
Generated September 28, 2026