Synchrony Financial · NYSE:SYF
Synchrony Financial — Q2 2020 Earnings Presentation
18 slides from Synchrony Financial's earnings presentation, Jul 21, 2020
Slide 1: 2Q'20 Financial Results
2Q’20 Financial Results July 21, 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: 2Q'20 Highlights
2Q’20 Highlights Financial Highlights Business Highlights • $48 million Net earnings, $0.06 diluted EPS • Launched a new partnership ‒ Increase in provision for credit losses for the quarter included impact from CECL implementation of $483 million, or $365 million after-tax, which equates to an EPS
Slide 4: Accelerating Digital Innovation
Accelerating Digital Innovation Digital Investments Helping Partners Fast-Track Online Transition (a) Customers are Seeking and Rapidly Adopting Contactless Commerce 72% 80% 49% prefer to skip are concerned agree that COVID- signature at the about signing 19 has inspired point of sale them to use co
Slide 5: COVID-19 Impact on Core Metrics
(a) COVID-19 Impact on Core Metrics Purchase Volume Growth New Accounts (b) % in YoY Growth Rates (36)% 6.2 Mar 1-17 Mar 18-31 Apr 1-15 Apr 16-30 May 1-15 May 16-31 Jun 1 -15 Jun 16-30 4.0 14% 3% (4)% 2Q'19 2Q'20 (9)% (15)% (c) (26)% (23)% Purchase Volume per Account (31)% $524 (8)% $481 Platform Pu
Slide 6: COVID Forbearance Impact – Program-to-Date through June 30th
COVID Forbearance Impact – Program-to-Date through June 30th Min Pay Due (MPD) Performance Statistics Fee Waivers $ in millions Enrollments 56% $ in millions, accounts in thousands $47 $3,178 Program-to-Date Enrolled At June 30, 2020 Never Enrolled 27% 1,655 $20 $1,075 16% 509 6% Balance Accounts Cr
Slide 7: Financial Results
Financial Results Summary earnings statement 2Q’20 Highlights B/(W) $ in millions, except per share statistics • $48 million Net earnings, $0.06 diluted EPS 2Q’20 2Q’19 $ % Total interest income $3,830 $4,738 $(908) (19)% • Net interest income down 18% driven by the Walmart sale and impact of COVID-
Slide 8: Growth Metrics
Growth Metrics Purchase volume (19)% Loan receivables (4)% $ in billions $ in billions $38.3 $81.8 $78.3 $31.2 Core (a) $35.8 $31.2 (13)% Core (a) $80.6 $78.3 (3)% 2Q'19 2Q'20 2Q'19 2Q'20 Dual Card / Dual Card / Co-Brand(b) $13.4 $10.4 (22)% (b) $19.2 $18.4 (4)% Co-Brand Average active accounts (14)
Slide 9: Platform Results
(a) Platform Results Retail Card Payment Solutions CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions (4)% (3)% (5)% $52.3 $19.8 $19.1 $9.7 $50.0 $9.2 Core (b) $51.9 $50.0 (4)% $19.0 $19.1 1% 2Q'19 2Q'20 V% 2Q'19 2Q'20 V% 2Q'19 2Q'20 V% Purchas
Slide 10: Net Interest Income
Net Interest Income Net interest income 2Q’20 Highlights $ in millions, % of average interest-earning assets • Net interest income decreased 18% compared to prior year driven by the Walmart sale and impact of COVID-19 (18)% − Interest and fees on loans decreased 18% compared to prior year driven by
Slide 11: 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 $3,500 $1,159 $1,087 $1,109 $1,125 $3,293 $1,046 4.76% 4.
Slide 12: Other Expense
Other Expense Other expense $ in millions (7)% 2Q’20 Highlights $1,059 $986 • Other expense down 7% – Decrease primarily due to the cost reductions from Walmart, lower purchase volume and accounts as well as reductions in certain discretionary spend • Efficiency ratio 36.3% vs. 31.3% prior year – Ot
Slide 13: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources Capital ratios (b) $ in billions CET1 Capital Ratio $86.9 $80.2 V$ 15.3% Unsecured $9.3 14.3% $8.0 $(1.3) Securitization $12.0 $(3.9) $8.1 2Q’19 2Q’20 Transition Deposits $65.6 $64.1 $(1.5) Tier 1 Capital Ratio 14.3% 16.3% 2Q'19 2Q'20 Variance 2Q’19 2Q’
Slide 14: 2Q'20 Wrap Up
2Q’20 Wrap Up • Net earnings of $48 million … $0.06 diluted earnings per share • Increase in provision for credit losses for the quarter included impact from CECL implementation of $483 million, or $365 million after-tax, which equates to an EPS reduction of $0.63 (a) • Core Growth metrics down due
Slide 15: Engage with us.
|! synchrony FINANCIAL Engage with us.
Slide 16: Appendix
Appendix [synchrony 16 FINANCIAL
Slide 17: 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 June 30, Total Retail Card Payment Solutions 2019 2020 2019 2020 2019 2020 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 18: 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 June 30, Total 2019 2020 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .