Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2018 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Oct 29, 2018
Slide 1: 3Q 2018 Investor Supplement
Exhibit 99.1 3Q 2018 Investor Supplement October 29, 2018
Slide 2: Disclaimers: Cautionary Statement Regarding Forward-Looking Statements
Disclaimers Cautionary Statement Regarding Forward-Looking Statements 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
Slide 3: Synchrony Financial Overview
Synchrony Financial Overview Leading Consumer Finance Business • A leading Private Label Credit Card (PLCC) provider in US • A leader in financing for major consumer purchases and healthcare services • Long-standing and diverse partner base Strong Value Proposition for Partners & Consumers • Advance
Slide 4: Partner-Centric Business with Leading Sales Platforms
Partner-Centric Business with Leading Sales Platforms Retail Card Payment Solutions CareCredit Private label credit cards, Promotional financing for Promotional financing Dual Cards™, general major consumer to consumers for purpose co-branded credit purchases, offering health and personal care cards
Slide 5: Customized Credit Products and Growing Online Bank
Customized Credit Products and Growing Online Bank Payment Retail Card Solutions CareCredit Private Label Dual CardTM Co-Brand Private Label Private Label Dual CardTM Retailer only Accepted at Accepted at Retailer and private Accepted at Accepted at acceptance network locations network locations net
Slide 6: Long-Standing and Diverse Partnerships
Long-Standing and Diverse Partnerships Average Relationship Length with Ongoing Retail Card Partners is 20 Years Diversified Retail Card Partners Retail Card Interest and Fees on Loans by Retail Market(a) Legend includes a sample of partners, with length of relationship in years at December 31, 2017
Slide 7: Diversified Across Sales Platforms
Diversified Across Sales Platforms Payment Solutions Retail Markets CareCredit Specialties Interest and Fees on Loans(a) Interest and Fees on Loans(a) 4% 2%3% 7% 5% 7% 9% 9% 46% 62% 19% 10% 17% Home Furnishings/Flooring Dental Electronics/Appliances Veterinary Automotive Cosmetic & Dermatology Home
Slide 8: Deep Integration Drives 2-3x Market Growth Rate
Deep Integration Drives 2-3x Market Growth Rate(a) 10.2% 11.9% 9.0% 6.5% 8.5% 3.0% 3.3% 4.1% 5.9% 4.2% 1.3% (1.0)% (b) Mass Electronics Healthcare Apparel/Dept. Home Furniture 2017 Market Size ($ in billions) $551 $339 $259 $202 $247 $109 2012-2017 Market Growth Rate 2012-2017 Synchrony Financial Pu
Slide 9: Focus on Higher Quality Asset Base
Focus on Higher Quality Asset Base Disciplined Underwriting Stronger Portfolio (a) FICO, consumer accounts opened since Consumer FICO beginning of 2010 721+ 33% 721+ 40% 36% 35% 35% 36% 35% 36% 37% 661-720 28% 35% 37% 37% 37% 38% 37% 37% 661-720 38% 601-660 20% 20% 20% 20% 20% 20% 19% 18% 601-660 21
Slide 10: Historical Net Charge-Offs & Risk-Adjusted Yield
Historical Net Charge-Offs & Risk-Adjusted Yield (a,c) Net Charge-Off Ratio Delivered Strong 12.00% Risk-Adjusted Returns 10.00% • Net charge-off performance was 8.00% generally consistent with general off Ratio - 6.00% purpose card issuers during the SYF financial crisis 4.00% Bank Card Average Net
Slide 11: Retailer Share Arrangements (RSA)
Retailer Share Arrangements (RSA) Provides a countercyclical buffer in stressed environments: 2013-2017 RSAs were 4.3% of average loan receivables(a) 2009 RSAs were 1.6% of average loan receivables(b) Shared Components Illustrative Examples Operating Program SYF Share of Return Total Program Return
Slide 12: Diverse Funding Sources and Strong Liquidity
Diverse Funding Sources and Strong Liquidity Diverse Funding Sources Strong Liquidity Profile % of liabilities excluding non-debt liabilities $ in billions $23.3 Undrawn $5.1 Credit Facilities Liquid $18.2 Deposits 72% 70%-75% assets 3Q18 • Diverse and stable funding sources Securitized Debt 15%-20%
Slide 13: Capital Deployment
Capital Deployment Capital Payout Distribution 140% 125% 120% 105% 100% 97% 80% 97% 63% 75% 60% 75% 40% 43% 20% 28% 30% 20% 22% 0% (a) (b) (c) (d) 2016 SYF Capital Plan 2017 SYF Capital Plan 2018 SYF Capital Plan Peer Capital Plan Average Dividends Buybacks • Improved capital payout distribution, wi
Slide 14: Strategic Priorities
Strategic Priorities Grow our business through our three sales platforms • Grow existing retailer penetration • Continue to innovate and provide robust cardholder value propositions • Add new partners and programs with attractive risk and return profiles Invest in ‘Next Generation’ data, analytics a
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth a reconciliation between GAAP results and non-GAAP managed-basis results for 2009. Twelve months ended December 31, 2009 Net charge-offs as a % of average loan receivables, including held for sale: GAAP 11.3% Securitization adjustments (0.6)% Ma