Synchrony Financial · NYSE:SYF
Synchrony Financial — Q4 2017 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Jan 19, 2018
Slide 1: 4Q'17 Financial Results
4Q'17 Financial Results January 19, 2018 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: 4Q'17 Highlights
3 4Q'17 Highlights • $385 million Net Earnings, $0.49 diluted EPS … $545 million Adjusted Net Earnings & $0.70 Adjusted diluted EPS • Strong growth metrics ‒ Loan Receivables up 7% ‒ Net Interest Income up 8% ‒ Purchase Volume up 3% ‒ Average Active Accounts up 4% • Net Charge-Offs 5.78% compared to
Slide 4: Growth Metrics
4 Growth Metrics 4Q'16 4Q'17 4Q'16 4Q'17 4Q'16 4Q'17 4Q'16 4Q'17 +3%Purchase Volume $ in billions Loan Receivables $ in billions Interest and Fees on Loans $ in millions $35.4 $36.6 $76.3 $81.9 $4,233 $3,91971.368.7 +4% +8% +7% Average Active Accounts in millions
Slide 5: Platform Results
5 Platform Results Retail Card Loan Receivables, $ in billions $52.6 $56.1 4Q'16 4Q'17 • Strong Loan Receivables growth across partner programs • Interest and Fees on Loans up 8% driven by Loan Receivables growth Payment Solutions Loan Receivables, $ in billions $15.6 $16.9 4Q'16 4Q'17 • Broad Loan
Slide 6: Financial Results Summary
6 Financial Results Summary Earnings Statement 4Q’17 Highlights $ in millions, except ratios Total Interest Income $4,291 $3,947 $344 9% Total Interest Expense 375 319 (56) (18)% Net Interest Income (NII) 3,916 3,628 288 8% Retailer Share Arrangements (RSA) (779) (811) 32 4% NII, after RSA 3,137 2,8
Slide 7: Net Interest Income
7 Net Interest Income 4Q’17 Highlights • Net Interest Income increased 8% compared to prior year driven by growth in Loan Receivables ‒ Interest and Fees on Loans increased 8% compared to prior year driven by average Loan Receivables growth • Net Interest Margin down 2bps. ‒ Loan Receivables mix as
Slide 8: Asset Quality Metrics
8 Asset Quality Metrics 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 Allowance For Loan Losses $ in millions, % of period-end Loan Receivables 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 Net Charge-Offs $ in millions, % of aver
Slide 9: Other Expense
9 4Q'16 4Q'17 Other Expense Employee Costs $315 $333 $18 6% Professional Fees 164 159 (5) (3)% Marketing/BD 130 156 26 20% Information Processing 88 99 11 13% Other 221 223 2 1% Other Expense $918 $970 $52 6% Efficiency 31.6% 30.3% (1.3)pts. (a) “Other Expense” divided by sum of “NII, after RSA” plu
Slide 10: Funding, Capital and Liquidity
10 Liquid Assets $13.6 $15.1 Undrawn Credit Facilities 6.7 6.0 Total Liquidity $20.3 $21.1 % of Total Assets 22.5% 22.0% Capital Ratios Common Equity Tier 1 % - Basel III transitional 4Q'16 4Q'17 Funding, Capital and Liquidity (b) 4Q'16 4Q'17 Basel III (fully phased-in) 17.0% 15.8% Liquidity $ in bi
Slide 11: 2017 Outlook versus 2017 Actual
11 Loan Receivables Growth 7% - 9% 7% Strong organic growth driven by value propositions and strategic investments; underwriting refinements moderately tempered strong growth Net Interest Margin 15.75% - 16.00% 16.35% Higher receivable yield, favorable earning asset mix, lower deposit betas RSAs/Ave
Slide 12: 2018 Outlook
12 Loan Receivables Growth (Period-End 12/31/18 versus 12/31/17) 5% - 7% 13% - 15% PayPal Credit portfolio added 3Q18 Net Interest Margin ~ 16.25% 15.75% - 16.00% Dilution from pre- funding RSAs/Average Receivables 4.2% - 4.4% 4.2% - 4.4% Portfolio/expansion of program will not impact range Net Char
Slide 13: Strategic Priorities
13 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, analytic
Slide 14: Appendix
14 Appendix
Slide 15: Non-GAAP Reconciliation
15 Non-GAAP Reconciliation The following table sets forth a reconciliation of non-GAAP measures included in this presentation to the comparable GAAP component at, and for the periods ended, December 31, 2017. COMMON EQUITY MEASURES GAAP Total common equity ...........................................
Slide 16: Synchrony Financial - Engage with us
|! synchrony FINANCIAL Engage with us.