Synchrony Financial (NYSE:SYF) FY Conference Summary Company Overview - **Company**: Synchrony Financial - **Date of Conference**: September 10, 2025 Key Industry Insights - **Consumer Spending Trends**: - Positive momentum in consumer spending observed in Q3, particularly in cosmetics, electronics, and clothing [3][4] - Average transaction values (ATVs) and transaction frequency have increased compared to the first half of the year [5] - Sales platforms showing growth include digital, diversified values, and health and wellness, while home, auto, and lifestyle categories are underperforming [5] - **Consumer Health**: - Consumers are described as resilient despite slight increases in unemployment and tariffs [9][10] - Non-prime payment rates are improving, indicating effective credit actions [10][11] - **Student Loans Impact**: - No significant negative impact on cardholders with student loans; performance remains consistent with the overall portfolio [13][15] Credit Quality and Performance - **Delinquency Rates**: - Delinquency rates have stabilized, with a slight improvement in 30+ and 90+ day delinquencies compared to historical averages [17][19] - Charge-offs are expected to remain within the target range of 5.6% to 5.8% for the year [21] - **Credit Actions**: - Shift towards a higher percentage of super-prime borrowers, with a corresponding decrease in non-prime borrowers [6][7] - Elevated payment rates are anticipated due to the credit composition changes [54] Strategic Partnerships and Growth Opportunities - **Walmart Partnership**: - Excitement around the renewed partnership with Walmart, with expectations for it to become a top 10 or even top 5 program due to strong consumer engagement and digital integration [36][44] - Anticipated launch of the new Walmart card later in the year, with a focus on a clean slate for credit offerings [34][39] - **Amazon Partnership**: - The renewal of the Amazon partnership includes the launch of a pay-later option, expected to enhance consumer experience and drive growth [33][34] Financial Metrics and Projections - **Net Interest Margin (NIM)**: - Guidance for second half NIM is approximately 15.6%, an improvement from the first half [64] - Factors contributing to NIM improvement include better delinquency rates, CD repricing, and effective management of excess liquidity [66][69] - **Long-term Growth Guidance**: - Long-term receivables growth target set at 10%, with expectations to return to mid to high single-digit growth rates as market conditions stabilize [58][63] Capital Allocation and Strategy - **Capital Management**: - CET1 ratio stands at 13.6%, improved year-over-year, with a focus on organic growth, dividend increases, and potential share repurchases [78][80] - Surplus capital is viewed as a strength, with plans to bring the capital ratio closer to target levels [82] Competitive Landscape - **Market Competition**: - The competitive environment remains aggressive, with a focus on digital capabilities and comprehensive product offerings [48][50] - 98% of top 25 partnerships are secured through 2027 and beyond, providing a stable foundation for growth [51] Conclusion - Overall, Synchrony Financial is experiencing positive trends in consumer spending and credit quality, with strategic partnerships set to enhance growth. The company is focused on maintaining a strong capital position while navigating a competitive landscape and preparing for future growth opportunities.

Well, let's stay on the market, bring in unlimited CEO and CIO Bob Elliot, the gold bug I mentioned before, but let's start with the Fed and what's going on there. You think Powell's caving. >> Well, I I think basically when you look at the change in his statement at Jackson Hole versus where he was just a few weeks before in the presser, it seems like there was a pretty material shift in the positioning uh particularly getting to a a focus on the labor market.I don't know how many times in the last presser ...

US consumer spending rose in July by the most in four months, indicating resilient demand in the face of stubborn inflation https://t.co/EKfOeVJiTD ...

Federal Reserve Policy - The market sell-off coincides with rising risk of no rate cut [1] - Attention is focused on the labor market as a key factor influencing the Fed's decisions, despite earlier FOMC minutes emphasizing inflation [2][3][5] - A 50 basis points rate cut is unlikely, with the probability of a 25 basis points cut decreasing to 77% from nearly 100% [4] - The Fed previously cut rates aggressively based on perceived labor market weakness [6] Labor Market - A weak July labor market report could trigger the Fed to act, even without inflation reaching the target [3] - The Fed's dual mandate focuses on maintaining stable prices and full employment [7] Tariffs and Consumer Spending - Retailers report mixed impacts from tariffs, with some initially absorbing costs but later changing their approach [9][10] - The impact of tariffs is difficult to assess due to ongoing announcements, delays, and rate adjustments [10] - Inflation data and company reports show a bifurcated impact, with some companies benefiting from front-run ordering and inventory building [11]

Economic Slowdown - Economic output showed a marked slowdown [1] - Consumer spending experienced a marked slowdown [1] - Jobs report indicated jarringly weak performance [1] Uncertainty - Future economic direction remains unclear [1]

Economic Slowdown & Job Market - US economy's job growth has slowed, with an average of 85,000 jobs added per month this year, compared to 168,000 jobs per month last year [2] - The report indicates deepening cracks in the US economy, with businesses putting expansion plans on hold due to economic uncertainty [4] - Potential US economic growth has shifted down due to changes in the labor force [9] Impact of Tariffs & Trade Policies - Tariffs are slowing job growth and economic growth [3] - Tariffs are expected to increase prices over time, impacting consumers [22] - Deportation policies are having an effect on the labor markets [5] - Tariffs on products from countries like Canada (originally 25% to 35%) and Switzerland (39%) could impact various sectors, including lumber, cars, and medicines [18][19] - Tariffs on Brazilian products, such as beef (50%), could be felt by consumers [21] Inflation & Consumer Spending - There is a possibility of stagflation, where growth slows (currently at about 12% to 2% annual rate) and inflation picks up closer to 3% rather than 2% [6] - Consumer spending growth is half of what it was a year ago, indicating concern among American consumers [16] - Tariffs are raising costs on everyday products, impacting back-to-school, Thanksgiving, and Christmas shopping [12] White House Perspective - The White House is nervous about the economic situation and is preaching patience [17] - The current economy is producing half as many new jobs as the "Biden economy" did in 2024 [14]

Consumer Spending - Consumer spending had been very strong but may finally be slowing down [2] - Credit card companies indicate consumer spending is at a healthy level, though not growing rapidly [2] - GDP data aligns with expectations of a consumer spending slowdown, but interpretation is difficult due to swings in net exports [4] - The industry is closely watching consumer spending, along with the labor market and inflation [5] Labor Market - Private sector job creation has decreased, potentially close to zero based on QCEW adjustment [7] - The unemployment rate remains low, indicating a balance between slowing demand and supply of workers [7] - Immigration policy has slowed the flow into the labor force [8] - Wages are gradually cooling, and vacancies to unemployment ratios have been stable [9] - The labor market is solid but faces downside risks due to declining demand and supply [9] Delinquencies - Bank earnings calls indicate good credit performance [3] - High-end delinquencies are noted, but their significance is unclear [3]

Economic Overview - The economy presents a strong headline snapshot, but closer inspection reveals concerning underlying data [1][2] - GDP reading shows 3%, largely a reversal from the first quarter [1] - The economy is basically at full employment, satisfying one of the Fed's dual mandates [1] Consumer Spending & Investment - Consumer spending is described as "okay" rather than strong [1] - Investment number was down 15% [1] - Consumer-driven companies are not having robust quarters, indicating consumers are feeling the pinch [9] Labor Market - Jolt data indicates a loss of 280,000 jobs in the system [1] - There were 260,000 less hires last month [1] - 150,000 less people quit their jobs, suggesting a less optimistic view of the economy [1] Inflation & Pricing - PCE and CPI numbers were warm, slightly higher than expected, but within an acceptable range [1] - Import numbers offset each other, from -4.7% to +5% [1] - Costs will ultimately be passed down to the consumer, as companies will not decrease their profit margins [4][5] Company Performance Indicators - UPS is a good indicator of e-commerce activity and last-mile delivery performance [8][11] - Starbucks numbers reflect consumer discretionary spending [8] - Whirlpool numbers indicate consumer willingness to upgrade appliances [9]

Visa posted quarterly earnings that topped analysts' expectations as its CEO said consumer spending "remains resilient." https://t.co/FIBpDqQ9oC ...

So we have a Fed meeting and then we have a jobs report. Let's start with the Fed meeting. The decision itself, not expecting too many fireworks there.But as always, there's a lot to talk about in that press conference, Julia. Absolutely. There's a lot going on.Of course, Chair Powell will put on his best poker face and reassuring voice and tone, which he's very, very good at, and say that, look, that things are there's a lot of disruption going on so far. You know, you've got a little bit of creeping highe ...