Synchrony Financial · NYSE:SYF
Synchrony Financial — Q4 2020 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Jan 29, 2021
Slide 1: 4Q'20 Financial Results
4Q’20 FINANCIAL RESULTS JANUARY 29, 2021
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: 4Q'20 Financial Highlights
4Q’20 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.24 14.64% 15.9% DILUTED EPS NET INTEREST MARGIN CET1 Full Year EPS of $2.27 compared to 15.01% liquid assets of $18.3 billion, 19.1% of total assets $81.9 billion 3.16% $62.8 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to
Slide 4: 4Q'20 Business Highlights
4Q’20 Business Highlights PARTNER EXPANSION CONSUMER PERFORMANCE DIGITAL ACCELERATION New Accounts (a) 7.5 6.1 (19)% ~60% DIGITAL APPLICATIONS* *Percentage of Total Applications 4Q'19 4Q'20 YTD 25.6 20.2 Purchase Volume per Account (21)% (b) 51% ONLINE SALES* $602 *Percentage of Retail Card Total $5
Slide 5: Equal Payment Financing Strategy
Equal Payment Financing Strategy PARTNER AND CUSTOMER NEEDS $15 billion TOTAL Partners Customers equal payment balances • Seamless Integration • Affordability as of December 2020 • Higher Average Order Value and • Transparency Sales • Ease and Convenience • Increased Conversion Rate • Flexibility •
Slide 6: Financial Results: Summary earnings statement
Financial Results Summary earnings statement B/(W) $ in millions, except per share statistics 4Q’20 4Q’19 $ % 4Q’20 Highlights Total interest income $3,993 $4,585 $(592) (13)% Total interest expense 334 556 222 40% • $738 million Net earnings, $1.24 diluted EPS • Net interest income down 9% Net inte
Slide 7: Growth Metrics
Growth Metrics Purchase volume (1)% Loan receivables (6)% $ in billions $ in billions $40.2 $39.9 $87.2 $81.9 $44.0 $94.0 4Q'19 4Q'20 4Q'19 4Q'20 Dual Card / Dual Card / Co-Brand $15.6 $15.1 (4)% Co-Brand $21.6 $19.5 (10)% Average active accounts (10)% Interest and fees on loans (11)% in millions $
Slide 8: Platform Results
(a) Platform Results Retail Card (8)% Loan receivables, $ in billions • Receivable reduction primarily due to 4Q’20 4Q'19 4Q’19 V% COVID-19 partially offset by growth in $56.4 Purchase $31.0 $31.3 1% digital partners volume Accounts 54.6 49.1 (10)% • Interest and fees on loans down 13% 4Q'20 $52.1 I
Slide 9: Net Interest Income
Net Interest Income Net interest income $ in millions (9)% % of average interest-earning assets 4Q’20 Highlights $4,029 $3,659 • Net interest income decreased 9% − Interest and fees on loans decreased 11% compared to prior year primarily driven by the impact of COVID-19 15.01% 14.64% • Net interest
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 $1,344 $1,331 $3,957 $3,874 $1,248 $1,221 $3,625 $3,723 $1,125 $3,500 $1,109 $1,046 $866 4.92% $2,453 $2,514 4.76% 4.43%
Slide 11: Other Expense
Other Expense Other expense $ in millions (7)% 4Q’20 Highlights $1,079 $1,000 Other expense down 7% • Decrease primarily due to lower purchase volume and accounts, lower employee costs, and lower operational losses Efficiency ratio 37.1% vs. 34.8% prior year • Increase in ratio driven by decrease in
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources Liquidity(a) $ in billions $ in billions $85.0 $23.4 $23.7 $78.6 V$ Unsecured $9.5 $8.0 $(1.5) Securitization $10.4 $7.8 $(2.6) Deposits $65.1 $62.8 $(2.3) 4Q'19 4Q'20 V% 4Q'19 4Q'20 Deposits 77% 80% +3 pts. Liquid assets $17.3 $18.3 Securitization 12%
Slide 13: 2021 Outlook – Framework on Key Drivers
2021 Outlook – Framework on Key Drivers (comments and trends in comparison to 2020, except where noted) Continued periods of uncertainty and volatility until pandemic is under control; 1H’21 assumption of continuing pressure from the pandemic and slow economic recovery; 2H’21 assumes pandemic largel
Slide 14: Footnotes
Footnotes 4Q’20 Business Highlights | slide 4: (a) New Accounts represent accounts that were approved in the respective period, in millions. (b) Purchase Volume per Account is calculated as the Purchase volume divided by Average active accounts, in $. (c) Average Balance per Account is calculated as
Slide 15: Synchrony: Changing What's Possible
»/ synchrony CHANGING WHAT’S POSSIBLE
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation* The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. At December 31, Total 2019 2020 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $