Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2020 Earnings Presentation
19 slides from Synchrony Financial's earnings presentation, Oct 20, 2020
Slide 1: 3Q'20 Financial Results
3Q’20 Financial Results October 20, 2020
Slide 2: Disclaimers
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'20 Highlights
3Q’20 Highlights Financial Highlights Business Highlights • $313 million Net earnings, $0.52 diluted EPS • Renewed and extended a key relationship ‒ Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reducti
Slide 4: Venmo Credit Card
Venmo Credit Card Apply in the Unique Plastic Use Mobile Phone to Venmo App Design Scan Plastic Native, easy experience Five designs, personalized Activate card Send payments or with customer’s QR code split purchases Smart, Dynamic Easy Spend Real-time Rewards Tracking Alerts Automatically added to
Slide 5: Accelerating Digital and Product Innovation
Accelerating Digital and Product Innovation Expanded Digital Products & Path To Purchase Credit Integration Capabilities 29% Mobile Channel Application Growth* * 3Q20 vs 3Q19 excluding Walmart ▪ Next Gen Native SDK for Partner Integration Financing offer Home Page integrated throughout ~60% ▪ Custom
Slide 6: COVID-19 Impact on Core Metrics
COVID-19 Impact on Core Metrics (a) Purchase Volume Growth New Accounts (b) % in YoY Growth Rates (17)% 6.3 Jan Feb Mar Apr May Jun Jul Aug Sep 5.3 13% 10% 5% (0)% (3)% (2)% 3Q'19 3Q'20 (6)% (12)% YTD 17.7 14.1 (20)% (c) (27)% Purchase Volume per Account $517 $560 8% Platform Purchase Volume Growth
Slide 7: COVID Forbearance Impact – Program-to-Date through Sept 30th
COVID Forbearance Impact – Program-to-Date through Sept 30th Min Pay Due (MPD) Performance Statistics Credit Score (a) Enrollments 57% $ in millions, accounts in thousands 11% Program-to-Date Enrolled 41% 30% $3,813 At Sept 30, 2020 Never Enrolled 27% 2,023 35% 36% 16% 7% 17% $227 119 24% 6% Balance
Slide 8: Financial Results
Financial Results Summary earnings statement 3Q’20 Highlights B/(W) $ in millions, except per share statistics • $313 million Net earnings, $0.52 diluted EPS 3Q’20 3Q’19 $ % Total interest income $3,837 $4,981 $(1,144) (23)% • Net interest income down 21% driven by the impact of COVID-19 and the Wal
Slide 9: Growth Metrics
Growth Metrics Purchase volume (6)% Loan receivables (6)% $ in billions $ in billions $38.4 $83.2 $78.5 $36.0 Core (a) $36.0 $36.0 0% Core (a) $82.3 $78.5 (5)% 3Q'19 3Q'20 3Q'19 3Q'20 Dual Card / Dual Card / Co-Brand(b) $13.7 $13.1 (5)% (b) $19.7 $18.3 (7)% Co-Brand Average active accounts (16)% Int
Slide 10: Platform Results
(a) Platform Results Retail Card Payment Solutions CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions (6)% (5)% (7)% $52.7 $20.5 $19.6 $10.0 $49.5 $9.4 Core (b) $52.6 $49.5 (6)% $19.7 $19.6 (1)% 3Q'19 3Q'20 V% 3Q'19 3Q'20 V% 3Q'19 3Q'20 V% Purc
Slide 11: Net Interest Income
Net Interest Income 3Q’20 Highlights Net interest income • Net interest income decreased 21% compared to prior year $ in millions, % of average interest-earning assets driven by the impact of COVID-19 and the Walmart sale − Interest and fees on loans decreased 22% compared to (21)% prior year primar
Slide 12: 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 $1,344 $1,331 $4,021 $3,957 $3,874 $1,248 $1,221 $3,625 $3,723 $1,125 $3,500 $1,087 $1,109 $1,046 $866 4.76% 4.92% $2,45
Slide 13: Other Expense
Other Expense Other expense 0% $ in millions 3Q’20 Highlights $1,064 $1,067 • Other expense flat – The restructuring charge and expenses related to the COVID-19 response were offset by cost reductions from Walmart, lower purchase volume and accounts, and reductions in certain discretionary spend • E
Slide 14: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources Capital ratios (b) $ in billions CET1 Capital Ratio $86.3 $79.3 15.8% V$ 14.5% Unsecured $9.4 $8.0 $(1.4) Securitization $10.9 $(3.1) $7.8 3Q'19 3Q'20 Transition Deposits $66.0 $63.5 $(2.5) Tier 1 Capital Ratio 14.5% 16.7% 3Q'19 3Q'20 Variance 3Q'19 3Q'
Slide 15: 3Q'20 Wrap Up
3Q’20 Wrap Up • Net earnings of $313 million … $0.52 diluted earnings per share • Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reduction of $0.11 • Increase in provision for credit losses for the quart
Slide 16: Engage with us.
|! synchrony FINANCIAL Engage with us.
Slide 17: Appendix
Appendix J! synchrony 1 FINANCIAL
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation (a) The following table sets forth the components of our Growth Metrics and impact from CECL for the periods indicated below. At Sept 30, Total Retail Card Payment Solutions 2019 2020 2019 2020 2019 2020 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 19: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (a) The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. At Sept 30, Total 2019 2020 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .