Synchrony Financial · NYSE:SYF
Synchrony Financial — Q2 2018 Earnings Presentation
14 slides from Synchrony Financial's earnings presentation, Jul 27, 2018
Slide 1: 2Q'18 Financial Results
Exhibit 99.3 2Q’18 Financial Results July 27, 2018
Slide 2: Disclaimers: Cautionary Statement Regarding Forward-Looking Statements
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'18 Highlights
2Q’18 Highlights Financial Highlights Business Highlights • $696 million Net Earnings, $0.92 diluted EPS Completed acquisition of the U.S. PayPal Credit financing program in July • Continued growth across the business ‒ Loan Receivables up 5% ‒ Net Interest Income up 3% ‒ Purchase Volume up 2% Added
Slide 4: Growth Metrics
Growth Metrics Purchase Volume +2% Loan Receivables +5% $ in billions $ in billions $34.3 $33.5 $75.5 $78.9 2Q'17 2Q'18 2Q'17 2Q'18 Average Active Accounts +1% Interest and Fees on Loans +4% in millions $ in millions $4,081 68.6 69.3 $3,927 2Q'17 2Q'18 2Q'17 2Q'18 4
Slide 5: Platform Results
Platform Results(a) Retail Card Payment Solutions CareCredit Loan Receivables, $ in billions Loan Receivables, $ in billions Loan Receivables, $ in billions +3% +8% +8% $16.9 $9.1 $51.5 $52.9 $15.6 $8.4 2Q'17 2Q'18 V% 2Q'17 2Q'18 V% 2Q'17 2Q'18 V% Purchase Volume $27.2 $27.4 +1% $3.9 $4.3 +9% $2.4 $
Slide 6: Financial Results Summary
Financial Results Summary Earnings Statement 2Q'18 Highlights B/(W) • $696 million Net Earnings, $0.92 diluted EPS $ in millions, except ratios 2Q'18 2Q'17 $ % • Net Interest Income up 3% primarily driven by Total Interest Income $4,174 $3,970 $204 5% growth in Loan Receivables Total Interest Expens
Slide 7: Net Interest Income
Net Interest Income Net Interest Income $ in millions, % of average Interest-Earning Assets 2Q'18 Highlights +3% • Net Interest Income increased 3% compared to prior year driven primarily by growth in Loan Receivables $3,637 $3,737 − Interest and Fees on Loans increased 4% compared to prior year dri
Slide 8: 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 $3,694 $3,831 $3,521 $3,295 $3,293 $3,120 $3,208 $1,198 $3,008 $1,141 $1,159 $2,585 $974 $1,001 $950 $847 $747 $765 4.80% 4.52%
Slide 9: Other Expense
Other Expense Other Expense $ in millions +7% 2Q'18 Highlights $975 • Other Expense up 7% $911 ‒ Other Expense increase driven primarily by growth and strategic investments • Efficiency Ratio 31.0% vs. 30.1% prior year 2Q'17 2Q'18 V$ V% Employee Costs $318 $351 $33 10% Professional Fees 158 177 19 1
Slide 10: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding Sources Capital Ratios $ in billions Common equity Tier 1 % - Basel III fully phased-in 17.2% 16.6% $80.7 V$ $73.6 $9.5 +$1.0 Unsecured $8.5 $12.2 $ - Securitization $12.2 2Q'17 2Q'18 $59.0 Deposits $52.9 +$6.1 (a) Liquidity $28.0 $ in billions $21.9 2Q'17 2Q'1
Slide 11: PayPal Impact on Outlook
PayPal Impact on Outlook Receivables Purchased: $7.6 Billion Closing Date: July 2, 2018 2018 Outlook With PayPal Credit Portfolio Previous Current Loan Receivables Growth(a) 13% - 15% 13% - 15% Net Interest Margin 15.75% - 16.00% 15.75% - 16.00% RSAs/Average Receivables 4.2% - 4.4% ~4.0% Net Charge-
Slide 12: Strategic Options for Walmart Portfolio
Strategic Options for Walmart Portfolio Portfolio Sale Retain Portfolio + Convert to GPCC Overview Overview • Decision to sell portfolio and estimated gain on sale • Expect to convert qualifying accounts to GPCC determined by 1Q’19 beginning in 1Q’19 • Portfolio would transfer to new issuer upon con
Slide 13: 2Q'18 Wrap Up
2Q’18 Wrap Up • Net earnings of $696 million … $0.92 diluted earnings per share • Broad based growth … Purchase volume +2%, Loan receivables +5%, Net interest income +3% • Completed acquisition of the U.S. PayPal Credit financing program in July • Added new partnerships … Furniture Row and The Good
Slide 14: Engage with us.
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