Synchrony Financial · NYSE:SYF
Synchrony Financial — Q2 2019 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Jul 19, 2019
Slide 1: 2Q'19 Financial Results
Exhibit 99.3 2Q'19 Financial Results July 19, 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: 2Q'19 Highlights
2Q'19 Highlights Financial Highlights Business Highlights • $853 million Net earnings, $1.24 diluted EPS • Completed successful conversion of PayPal Credit ‒ Reduction in the reserve related to the expected Walmart accounts portfolio sale was $247 million, or $186 million after-tax; EPS benefit of $
Slide 4: Platform Results
Platform Results(a) (b) Retail Card Payment Solutions(b) CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions +2% +8% +7% $19.8 $9.7 $51.5 $52.3 $18.3 $9.1 (c) Core $42.2 $51.9 +23% 2Q'18 2Q'19 V% 2Q'18 2Q'19 V% 2Q'18 2Q'19 V% Purchase volume $26
Slide 5: Digital Innovation Driving Growth
Digital Innovation Driving Growth Digital Innovation Driving Growth 34% Digital Apply Online Sales* * Percentage of Retail Card total 47% Mobile Channel Application Digital Servicing Growth* * 2Q19 vs 2Q18 ~50% Digital Applications* * Percentage of Total Applications Synchrony Plug-In (SyPI) >$2B Pa
Slide 6: Value of Data Analytics
Value of Data Analytics Credit Line Optimization Fraud Reduction Average CL Assignment Average 6 Month Fraud Rate by High Engagement Customers Level of Customer Engagement Improved credit line Advanced customer assignments for our -70–90% segmentation leads +20–30% partners’ best to a reduction of c
Slide 7: Financial Results Summary
Financial Results Summary earnings statement 2Q'19 Highlights B/(W) • $853 million Net earnings, $1.24 diluted EPS $ in millions, except ratios 2Q'19 2Q'18 $ % • Net interest income up 11% driven by growth in Total interest income $4,738 $4,174 $564 14% Loan receivables Total interest expense 583 43
Slide 8: Growth Metrics
Growth Metrics Purchase volume +12% Loan receivables +4% $ in billions $ in billions $38.3 $34.3 $78.9 $81.8 Core(a) $69.6 $81.4 +17% 2Q'18 2Q'19 2Q'18 2Q'19 Average active accounts +9% Interest and fees on loans +14% in millions $ in millions $4,636 75.5 69.3 $4,081 2Q'18 2Q'19 2Q'18 2Q'19 (a) Loan
Slide 9: Net Interest Income
Net Interest Income Net interest income $ in millions, % of average interest-earning assets 2Q'19 Highlights +11% • Net interest income increased 11% compared to prior year driven by growth in Loan receivables $4,155 − $3,737 Interest and fees on loans increased 14% compared to prior year driven by
Slide 10: 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 $1,198 $1,248 $3,521 $3,625 $1,141 $1,159 $3,208 $3,293 $1,087 $1,001 $950 4.7
Slide 11: Other Expense
Other Expense Other expense $ in millions +9% 2Q'19 Highlights $1,059 • Other expense up 9% $975 ‒ Other expense increase driven primarily by PayPal Credit program • Efficiency ratio 31.3% vs. 31.0% prior year 2Q'18 2Q'19 V$ V% Employee costs $351 $358 $7 2% Professional fees 177 231 54 31% Marketin
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources Capital ratios $ in billions Common equity Tier 1 % - Basel III fully phased-in $86.9 V$ $80.7 16.6% $9.3 $(0.2) 14.3% Unsecured $9.5 $12.0 $(0.2) Securitization $12.2 2Q'18 2Q'19 Deposits $59.0 $65.6 +$6.6 (a) Liquidity $28.0 $ in billions $23.7 2Q'18
Slide 13: 2Q'19 Wrap Up
2Q'19 Wrap Up • Net earnings of $853 million … $1.24 diluted earnings per share • Reduction in the reserve related to the expected Walmart portfolio sale was $247 million, or $186 million after-tax; EPS benefit of $0.27 (a) • Broad based growth … Purchase volume +12%, Core Loan receivables +17%, Net
Slide 14: Engage with us.
|! synchrony FINANCIAL Engage with us.
Slide 15: Appendix
Appendix |" synchrony 15 FINANCIAL Ne
Slide 16: 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 June 30, Total Retail Card 2018 2019 2018 2019 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .