Slide 1: 2016 First Quarter Investor Presentation
2016 First Quarter Investor Presentation May 2, 2016 Exhibit 99.1
Slide 2: Forward-looking statements
2 This presentation contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. Forward-looking statements may be
Slide 3: Synchrony Financial Overview
3 Synchrony Financial Overview Strong Value Proposition for Partners and Consumers • Advanced data analytics and targeted marketing capabilities • Dedicated team members support partners to help maximize program effectiveness • Enhanced sales growth and additional economic benefits for partners • Ac
Slide 4: Business Overview
Business Overview
Slide 5: Partner-Centric Business with Leading Sales Platforms
5 Partner-Centric Business with Leading Sales Platforms (a) Platform revenue for period 2Q15 through 1Q16, $ in millions. Platform revenue is the sum of “interest and fees on loans,” plus “other income,” less “retailer share arrangements”. See non-GAAP reconciliation in appendix. (b) $ in billions,
Slide 6: Customized Products
6 Customized Products Credit Products Retailer only acceptance Accepted at network locations Deposit Products Retailer and private network acceptance Accepted at provider network locations Private Label Dual CardTM Affinity to retailer, provides customized benefits & features Big-ticket focus, offer
Slide 7: Long-Standing Partnerships
7 26% Long-Standing Partnerships (a) As of March 31, 2016. (b) Platform revenue is the sum of “interest and fees on loans,” plus “other income,” less “retailer share arrangements”. See non-GAAP reconciliation in appendix. (c) Excludes certain credit card portfolios that were sold, have not been rene
Slide 8: Largest PLCC Provider in U.S.
8 Largest PLCC Provider in U.S. Source: Nilson Report, % of 2008 market. 80% 85% 90% 95% 100% 105% Private Label Credit Cards are 6% above pre-crisis levels at $108 billion General Purpose Credit Cards are down 11% from peak at $765 billion 2008 2009 2010 2011 2012 2013 Source: Nilson Report, PLCC y
Slide 9: Expansive Opportunity
9 Expansive Opportunity (a) (a) Source: Nilson. $873 Billion of U.S. Credit Card Receivables $48 $52 $57 $61 2011 2012 2013 2014 $ in billions • Majority of growth is organic • Targeted marketing programs, digital capabilities, and value propositions helped drive organic growth Strong Receivables Gr
Slide 10: Deep Integration Drives 2-3x Market Growth Rate
10 1.5% 2.6% 2.7% 0.6% 7.6% 1.6% 9.2% 2.9% 7.5% 9.4% 10.1% 9.8% Mass Electronics Healthcare Apparel/Dept. Home Furniture $531 $278 $223 $213 $213 $77 2012-2014 Market Growth Rate 2012-2014 Synchrony Financial Purchase Volume Growth Rate 2014 Market Size ($ in billions) • Over 80 years of retail heri
Slide 11: Attracting New Partners
11 11 Retail Card Payment Solutions We attract partners who value our: • Experience & partnership—long history of improving sales, customer loyalty, and retention • Differentiated capabilities: - Marketing and analytics - Innovation - Mobile and online - Underwriting and lifecycle management - On-si
Slide 12: Fast-Growing Online Bank
12 $7.4 $8.0 $9.2 $11.0 $13.0 $15.7 $18.3 $19.7 $21.3 $24.4 $27.6 $29.7 $32.5 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Growth Strategy Competitive rates and superior service afforded by low cost structure of online bank Opportunity to further leverage cross-sell opportuni
Slide 13: Robust Data, Analytics and Digital Capabilities
Robust Data, Analytics and Digital Capabilities
Slide 14: Proprietary Closed-Loop Network Advantages
14 Proprietary Closed-Loop Network Advantages Customer Merchant Acquirer Network Issuer General Purpose Card and Co-Branded Cards Synchrony Financial Closed Loop Network for PLCC and Dual CardTM Citi Capital One Chase Date Merch. Channel Brand Cat./SKU $ 4/2/16 Belk In- Store DKNY Women’s Shoes 468X
Slide 15: Leverage Data/Analytics to Drive Partner Performance
15 15 SKU/Category Data Leverage Data/Analytics to Drive Partner Performance Through the data we collect over our network, we bring more insight to our partners DUAL CARDTM World spend Analyzing spend outside the retailer delivers insights to drive customers back in-store Combine shopper insights wi
Slide 16: Innovative Digital Capabilities
16 16 eCommerce & Mobile Innovative Digital Capabilities Our innovative digital capabilities drove a 29% increase in online and mobile purchase volume since 1Q15 Mobile Payments Consumer • Investing in enhanced user experience: - Customized offers - Quickscreen - Auto pre-fill • Mobile applications
Slide 17: Financial Performance & Business Highlights
Financial Performance & Business Highlights
Slide 18: 1Q16 Highlights
18 1Q16 Highlights Financial Highlights Business Highlights • $582 million Net earnings, $0.70 diluted EPS • Strong growth across the business - Purchase volume +17% - Loan receivables +13% - Platform revenue +13% • Asset quality metrics relatively stable - Net charge-offs were 4.70% compared to 4.5
Slide 19: Strong Operating Performance
19 $552 $582 4.53% 4.70% Net Earnings $ in millions 1Q15 1Q16 Loan Receivables $ in billions, period-end balances + 13% Net Charge-Offs (b) % of average loan receivables Platform Revenue (a) $ in millions $2,581 $2,920 + 13% Relatively Stable $58.2 $65.8 1Q15 1Q16 1Q15 1Q16 1Q15 1Q16 (a) Platform re
Slide 20: Peer comparison: margins, growth, balance sheet
20 (a) Segment data for AXP-U.S Consumer Services and COF-Domestic Card. Other data-total company level. (b) SYF yield calculated as loan receivable yield less net charge-off rate. AXP-U.S. Consumer Services yield calculated as total card member loan yield less net charge-off rate on card member loa
Slide 21: Focus on Higher Quality Asset Base
21 19% 8% 20% 20% 61% 72% • Synchrony Financial controls underwriting and credit line decisions • Focus on stronger underwriting has led to higher quality portfolio - 72% of loan receivables have FICO > 660 Stronger Portfolio U.S. consumer FICO (a) Delinquency Performance 30+ days past due as a % of
Slide 22: Net Charge-Off Ratio and Risk-Adjusted Yield
22 Net Charge-Off Ratio Risk-Adjusted Yield (a) Peers include: AXP US Card Services, BAC US Credit Card, C Citi- Branded Cards North America, COF Domestic Card, DFS Credit Card, JPM Credit Card, and WFC Consumer Credit Card. SYF – total company level. (b) Peers include: AXP US Card Services, BAC US
Slide 23: Retailer Share Arrangements (RSA)
23 100% 50% 50% 1.5% 2.5% Total Program Return Shared Components Illustrative Examples Program Revenue • Interest Income • Fee Income • Interchange Fees Program Expenses • Interest Expense • Provision for Loan Losses • Loyalty Expense • Operating Expenses SYF Share of Return Retailer Share of Return
Slide 24: Diverse Funding Sources and Strong Liquidity
24 Diverse Funding Sources and Strong Liquidity Deposits Securitized Debt Unsecured Debt 1Q16 Long-term target 12% 69% 19% 15%-20% 60%-70% 15%-20% Diverse Funding Sources % of liabilities excluding non-debt liabilities Strong Liquidity Profile $ in billions $22.2 Highly liquid assets Undrawn capacit
Slide 25: Strong Position Relative to Peers
25 Strong Position Relative to Peers Strong Capital Profile Peers include AXP, DFS, and COF. (a) CET1 ratios are on an estimated, fully phased-in basis. See non-GAAP reconciliation in appendix. (b) Subject to board and regulatory approval. Sources: Company filings and SNL. 2.8% 2.5% SYF Peer Average
Slide 26: Strategic Priorities
26 Strategic Priorities Grow our business through our three sales platforms Position business for long-term growth Operate with a strong balance sheet and financial profile Leverage strong capital position Expand robust data, analytics and digital capabilities • Grow existing retailer penetration •
Slide 27: Appendix
Appendix
Slide 28: Platform Revenue Reconciliation
28 ($ in millions) Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Dec 31, Mar 31, 2015 2015 2015 2015 2016 2015 2016 Platform Revenue Total: Interest and fees on loans $3,140 $3,166 $3,379 $3,494 $3,498 $13,179 $13,537 Other income 101 120 84 87 92 392 383 Retailer share arrangements (660) (621) (723) (734
Slide 29: Non-GAAP Reconciliation
29 Non-GAAP Reconciliation The following table sets forth a reconciliation of each component of our capital ratios to the comparable GAAP component at March 31, 2016. COMMON EQUITY MEASURES GAAP Total common equity .....................................................................................
Slide 30: Non-GAAP Reconciliation
30 Non-GAAP Reconciliation The following table sets forth a reconciliation between GAAP results and non-GAAP managed-basis results for 2009. Net charge-offs as a % of average loan receivables, including held for sale: GAAP 11.3% Securitization adjustments (0.6)% Managed-basis 10.7% Interest and fees