Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2014 Earnings Presentation
15 slides from Synchrony Financial's earnings presentation, Oct 17, 2014
Slide 1: 3Q'14 Financial Results
3Q’14 Financial Results October 17, 2014 Exhibit 99.3
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 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 information, see the
Slide 3: Business Overview
3 (a) Source: Nilson (b) Includes loan receivables of $56.8 billion and loan receivables held for sale of $1.5 billion Business Overview Strong Value Proposition for Partners and Consumers 2 Deep partner integration enables customized loyalty products, across channels Advanced data analytics and
Slide 4: 3Q'14 Highlights
4 3Q’14 Highlights Financial highlights • $548 million Net earnings, $0.70 EPS • Strong growth across the business Purchase volume +11%, Loan receivables +7%, Platform revenue +9% • Asset quality continues to improve Net charge-offs down 2bps. 30+ delinquency down 6bps. • Expenses in-line with
Slide 5: Growth Metrics
5 Growth Metrics +11% Purchase volume $ in billions Loan receivables $ in billions Active accounts Average active accounts in millions Platform revenue $ in millions 3Q’13 3Q’14 $23.5 $26.0 $53.3 $56.8 $2,519 $2,317 59.9 56.2 +7% +9% +7% 3Q’13 3Q’14 3Q’13 3Q’14 3Q’13 3Q’14 (a) $58.3 billion total re
Slide 6: Platform Results
6 Platform Results Retail Card Loan receivables, $ in billions $36.2 $38.5 3Q’13 3Q’14 (a) Loan receivables do not include $1.5 billion of balances classified as held for sale, 11% growth including held for sale receivables Strong receivables growth across partner programs Platform revenue up 10
Slide 7: Financial Results Summary
7 Financial Results Summary earnings statement Third quarter 2014 highlights $ in millions, except ratios Net interest income (NII) $2,879 $2,703 $176 7% Retailer share arrangements (RSA) (693) (680) (13) (2)% NII, after RSA 2,186 2,023 163 8% Provision for loan losses 675 541 (134) (25)% Other inco
Slide 8: Net Interest Income
8 Net Interest Income Third quarter 2014 highlights • Net interest income up 7% driven by growth in receivables partially offset by higher funding costs Interest and fees on loans up 8% • Net interest margin decline driven primarily by increase in liquidity portfolio Receivable yield 21.8%, down
Slide 9: Asset Quality Metrics
9 Asset Quality Metrics Net charge-offs $ in millions, % of average loan receivables including held for sale 30+ days past due $ in millions, % of period-end loan receivables Allowance for loan losses $ in millions, % of period-end loan receivables 90+ days past due $ in millions, % of period-end lo
Slide 10: Other Expense
10 Other expense $ in millions Other Expense Employee cost $173 $239 $66 38% Professional fees 120 159 39 33% Marketing/BD 54 115 61 113% Info. processing 47 47 - -% Other 181 168 (13) (7)% Other expense $575 $728 $153 27% Efficiency 26.9% 31.9% +5.0pts. $575 Third quarter 2014 highlights • Expenses
Slide 11: Capital and Liquidity
11 Capital and Liquidity Liquidity $ in billions Liquidity portfolio $2.1 $14.1 Undrawn securitization capacity - 5.6 Total liquidity $2.1 $19.7 % of total assets 3.8% 26.9% 3Q’14 $19.7 $2.1 3Q’13 Capital ratios Estimated percentage, 3Q’14, $ in billions 15.1% BI T1C % Tier 1 common $8.8 $8.8 Risk w
Slide 12: Funding Profile
12 Funding profile Funding sources $ in billions 3Q’13 3Q’14 Variance Deposits 47% 54% +7pts. Securitization 33% 25% (8)pts. GE Capital loan 20% 2% (18)pts. 3rd Party Debt - 19% 19pts. $46.8 $60.3 Deposits Securitization GE Capital loan 3rd Party Debt $22.2 $15.4 $9.2 $32.7 $15.1 $11.1 Third quarter
Slide 13: 3Q'14 Wrap Up
13 3Q’14 Wrap Up • Broad based growth … Purchase volume +11%, Loan receivables +7%, Platform revenue +9% and Active accounts +7% • Extended 2 of our largest partner relationships … including Lowe’s renewal, we have now renewed our 5 largest partnerships through 2019 and beyond • Added ~ 1,000 partne
Slide 14: Summary
14 Summary Growth objectives supported by online bank with strong deposit growth Solid fundamentals with strong returns Attractive growth opportunities, particularly to further leverage data analytics, mobile and e-capabilities Private Label Credit Card leader well-positioned to capitalize on deep p
Slide 15: 3Q'14 Financial Results
3Q’14 Financial Results October 17, 2014