Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2019 Earnings Presentation
17 slides from Synchrony Financial's earnings presentation, Oct 18, 2019
Slide 1: 3Q'19 Financial Results
Exhibit 99.3 3Q'19 Financial Results October 18, 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: 3Q'19 Highlights
3Q’19 Highlights Financial Highlights Business Highlights • $1.056 billion Net earnings, $1.60 diluted EPS • Expanded and extended key partnership ‒ Reduction in the reserve related to the Walmart consumer portfolio sale completed in October was $326 million, or $248 million after-tax; EPS benefit o
Slide 4: Platform Results
Platform Results(a) (b) (b) Retail Card Payment Solutions CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions (11)% +7% +8% $59.1 $20.5 $10.0 $52.7 $19.1 $9.3 (c) Core $49.9 $52.6 +5% 3Q'18 3Q'19 V% 3Q'18 3Q'19 V% 3Q'18 3Q'19 V% Purchase volume
Slide 5: Growing the Direct to Consumer Channel
Growing the Direct to Consumer Channel Objective Become a leading digital bank with competitive products and capabilities that drive deeper customer relationships and address SYF’s funding needs, while launching innovative lending products Deposits Lending • Continuing to support • Successful conver
Slide 6: Synchrony Deposit Products
Synchrony Deposit Products Deposit Balances Acquisition Costs $ in billions +20% ~(20)% CAGR vs. 5% for Reduction in industry(a) Acquisition Cost $64 $66 $56 $52 $43 $35 $26 2016 2019 Investments in digital '13 '14 '15 '16 '17 '18 3Q'19 marketing reducing our acquisition costs Rate Rank (b) #1 #19
Slide 7: Synchrony Mastercard Sales / Active Account
Synchrony Mastercard® Sales / Active Account ~40%(a) Increase in Sales / Active Account pre-period post-period Highlights Balance / Active Account Attractive 2% Cash Back value proposition plus spend incentives at launch Strong activation and repeat usage … ~50% good balance growth since Increas
Slide 8: Financial Results Summary
Financial Results Summary earnings statement 3Q'19 Highlights B/(W) $ in millions, except per share statistics • $1.056 billion Net earnings, $1.60 diluted EPS 3Q'19 3Q'18 $ % Total interest income $4,981 $4,694 $287 6% • Net interest income up 4% driven by growth in Loan receivables Total interest
Slide 9: Growth Metrics
Growth Metrics Purchase volume +5% Loan receivables (5)% $ in billions $ in billions $38.4 $36.4 $87.5 $83.2 Core(a) $78.3 $83.1 +6% 3Q'18 3Q'19 3Q'18 3Q'19 Average active accounts +2% Interest and fees on loans +6% in millions $ in millions $4,890 75.5 76.7 $4,617 3Q'18 3Q'19 3Q'18 3Q'19 (a) Loan r
Slide 10: Net Interest Income
Net Interest Income Net interest income $ in millions, % of average interest-earning assets 3Q'19 Highlights +4% • Net interest income increased 4% compared to prior year driven by growth in Loan receivables $4,389 $4,206 − Interest and fees on loans increased 6% compared to prior year driven by ave
Slide 11: Asset Quality Metrics
Asset Quality Metrics 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, % of average loan receivables including held for sale $4,430 $4,021 $1,344 $1,331 $3,831 $3,957 $3,694 $3,723 $1,248 $1,221 $3,521 $3,625 $1,141 $1,198 $1,159 $3,293 $1,087 $950 (a)
Slide 12: Other Expense
Other Expense Other expense $ in millions +1% 3Q'19 Highlights $1,054 $1,064 • Other expense is up 1% driven by growth • Efficiency ratio 30.8% vs. 31.0% prior year 3Q'18 3Q'19 V$ V% Employee costs $365 $359 $(6) (2)% Professional fees 232 205 (27) (12)% Marketing/BD 131 139 8 6% Information process
Slide 13: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources Capital ratios $ in billions Common equity Tier 1 % - Basel III fully phased-in V$ $86.1 $86.3 $9.6 $9.4 $(0.2) 14.2% 14.5% Unsecured $14.2 $10.9 $(3.3) Securitization 3Q'18 3Q'19 Deposits $62.3 $66.0 +$3.7 Liquidity(a) $ in billions $23.3 $21.7 3Q'18 3
Slide 14: 3Q'19 Wrap Up
3Q'19 Wrap Up • Net earnings of $1.056 billion … $1.60 diluted earnings per share • Reduction in the reserve related to the Walmart consumer portfolio sale was $326 million, or $248 million after-tax; EPS benefit of $0.38 (a) • Broad based growth … Purchase volume +5%, Core Loan receivables +6%, Net
Slide 15: Engage with us.
|! synchrony FINANCIAL Engage with us.
Slide 16: Appendix
Appendix |" synchrony 16 FINANCIAL Ne
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth the components of our Loan receivables for the periods indicated below. $ in billions At September 30, Total Retail Card 2018 2019 2018 2019 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .