Synchrony Financial · NYSE:SYF
Synchrony Financial — Q4 2018 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Jan 23, 2019
Slide 1: 4Q'18 Financial Results
Exhibit 99.3 4Q’18 Financial Results January 23, 2019
Slide 2: Disclaimers: Cautionary Statement Regarding Forward-Looking Statements
Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional informatio
Slide 3: 4Q'18 Highlights
4Q’18 Highlights Financial Highlights Business Highlights • Renewed/extended key relationships • $783 million Net Earnings, $1.09 diluted EPS • Strong growth metrics ‒ Loan Receivables up 14% ‒ Net Interest Income up 11% • Added new partnerships ‒ Purchase Volume up 10% ‒ Average Active Accounts up
Slide 4: Growth Metrics
Growth Metrics Purchase Volume +10% Loan Receivables +14% $ in billions $ in billions $40.3 $93.1 $36.6 $81.9 4Q'17 4Q'18 4Q'17 4Q'18 Average Active Accounts +8% Interest and Fees on Loans +13% in millions $ in millions 77.4 $4,774 71.3 $4,233 4Q'17 4Q'18 4Q'17 4Q'18 4
Slide 5: Platform Results
Platform Results(a) Retail Card Payment Solutions CareCredit Loan Receivables, $ in billions Loan Receivables, $ in billions Loan Receivables, $ in billions +16% +9% +7% $65.2 $18.4 $9.5 $56.1 $16.9 $8.9 4Q'17 4Q'18 V% 4Q'17 4Q'18 V% 4Q'17 4Q'18 V% Purchase Volume $29.8 $33.1 +11% $4.4 $4.7 +8% $2.4
Slide 6: Financial Results Summary
Financial Results Summary Earnings Statement 4Q'18 Highlights • B/(W) $783 million Net Earnings, $1.09 diluted EPS $ in millions, except ratios 4Q'18 4Q'17 $ % • Net Interest Income up 11% driven by growth in Total Interest Income $4,876 $4,291 $585 14% Loan Receivables Total Interest Expense 543 37
Slide 7: Net Interest Income
Net Interest Income Net Interest Income $ in millions, % of average Interest-Earning Assets 4Q'18 Highlights +11% • Net Interest Income increased 11% compared to prior year driven by growth in Loan $4,333 Receivables $3,916 − Interest and Fees on Loans increased 13% compared to prior year driven by
Slide 8: Asset Quality Metrics
Asset Quality Metrics 30+ Days Past Due Net Charge-Offs $ in millions, % of period-end Loan Receivables $4,430 $ in millions, % of average Loan Receivables including held for sale $4,021 $3,831 $3,694 $3,521 $1,248 $3,295 $3,293 $1,198 $1,159 $3,120 $3,208 $1,141 $1,087 $1,001 $974 $950 $847 4.80% 4
Slide 9: Other Expense
Other Expense Other Expense $ in millions +11% 4Q'18 Highlights $1,078 • Other Expense up 11% $970 ‒ Other Expense increase driven primarily by growth • Efficiency Ratio 30.4% vs. 30.3% prior year 4Q'17 4Q'18 V$ V% Employee Costs $330 $353 $23 7% Professional Fees 159 231 72 45% Marketing/BD 156 166
Slide 10: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding Sources Capital Ratios $ in billions Common equity Tier 1 % - Basel III fully phased-in $88.0 V$ 15.8% $77.3 $9.6 +$1.3 14.0% Unsecured $8.3 $14.4 +$1.9 Securitization $12.5 4Q'17 4Q'18 $64.0 +$7.5 Deposits $56.5 (a) Liquidity $21.1 $ in billions $19.2 4Q'17 4Q
Slide 11: 2018 Performance
2018 Performance 2018 Outlook 2018 Actual Drivers PayPal Credit program acquisition and solid organic growth driven by value Loan Receivables Growth 13% - 15% 14% propositions and strategic investments; underwriting refinements tempered growth Impacted by pre-funding PayPal Credit Net Interest Margi
Slide 12: 2019 Outlook
2019 Outlook 2019 Outlook Including Impact of Drivers Walmart Portfolio Conveyance (a) Core Loan Receivables Growth (Period-End Strong organic growth driven by value 5% to 7% 12/31/19 versus 12/31/18 excluding Walmart) propositions and strategic investments Consistent with 2018 Net Interest Margin l
Slide 13: Strategic Priorities
Strategic Priorities Grow our business through our three sales platforms • Grow existing partner penetration • Continue to innovate and provide robust cardholder value propositions • Add new partners and programs with attractive risk and return profiles Invest in ‘Next Generation’ data analytics, AI
Slide 14: Appendix
Appendix if! synchrony al rm
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth a reconciliation of non-GAAP measures included in this presentation to the comparable GAAP component for the period ended December 31, 2017. $ in millions, except per share statistics Quarter Ended ADJUSTED NET EARNINGS December 31, 2017 GAAP ne
Slide 16: Engage with us.
|" synchrony FINANCIAL Engage with us.