Synchrony Financial (SYF) 20 Jul 212021 Q2 Earnings call transcript

Welcome to the Synchrony Financial Second quarter 2021 Earnings Conference Call. My name is Vanessa and I will be your operator for today's call. At this time all participants are in a listen-only mode, later we will conduct a question-and-answer session. Please note that this conference is been recorded. I will now turn the call over to Kathryn Miller, Senior Vice President of Investor Relations, you may begin.

morning, good and you everyone. Thank quarterly Welcome call. conference to our earnings

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looking materially. today statements. I started, to you will wanted differ to include filings, our comments and might results forward the materially statements Before and we get website. SEC to that which risks These that remind actual subject We are actual our available results are factors our in cause uncertainty, could list differ on

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measures a can in materials for find You call. of our reconciliation GAAP measures today's financial to these

transcripts guarantee The edit of our Finally, our and does located are Synchrony not website. teleconference by not for on Financial the accuracy responsible authorized webcasts provided nor third is earnings only parties.

Doubles. the Chief over this Officer. On and Synchrony's I President Chief Wenzel Officer now President and Brian Brian will turn Doubles call morning Executive Brian Financial are to Vice the Executive and call

the proud moving and Thanks proposition second the Kathryn strategic results COVID our continued our a consumer of early execute has model, pandemic enabled morning, of power delivered of technology resurgence. team value during Synchrony indications I quarter strong more With our to and good everyone. the our the of reflecting the XX now partner-centered durability priorities. of the year how rearview a into than mirror am on

address stakeholders. and also us our enabled Our for products services multiproduct, risk-adjusted needs while adapt strategy evolving and partner’s nimbly multi deliver all our returns capability best-in-class generating appropriate to has to

$X.XX on started business reflected earnings $X.XX over quarter, Let's of $X.X financial share. the an by per diluted This from and a of the key reached the the we as of our or reviewing mark really net initial highlights increase things anniversary some impact last record year, get the billion pandemic's world.

well. expenses and were margin on interest end efficiency Credit continued track down Elevated quarter, last $XXX efficiency the net X.XX% continued year. business. yield. interest last expense perform resulting all than volume for our on actions, five Net almost purchase we X% remain $XX.X second the about grateful reflecting receivables loan industrywide million cost done down in for which were largely and a Purchase trends the This per by toward deeply for to as points per X% higher second even of in our last the impact and invest from by to remove year-to-date down was planned. quarter charge-offs platforms. spend year for to from while period in points account the to continue return XX.X% income reflecting in receivables XX%, Average ratio and payment an account. XX% normalcy. primarily our to basis community volume year. increase increase strength base business across levels XX% was were The last workers, eventual XX.XX% over volume excess are billion as in payment have X% the increase basis initiatives make our scientists new were was government to continue leading liquidity XXX was lower We for leaders grew persistently the up quarter. year XX forbearance progress year down of support compared offset about stimulus elevated have rate accounts net to to a from We very rates the slight and as about our were broad-based purchase This frontline balances

Turning we mix some to versus X% our our rate quarter versus last to during last to the year reflecting year, a end, excess billion of retirement manage deposits due retail at actions sheet the of quarter increase deposit of or represented our second $X took funding XX% slight our down liquidity balance were debt position. Deposits of XXXX.

returned in we million quarter dividends. the During of capital, common $XXX and repurchases through share million stock in $XXX million $XXX

our We our also our of differentiators continue to capabilities. one business, digital remains competitive reinvest greatest in

meet to and met. That invest they wherever We want however and to change and continue enable fairly our services in quickly. where how to that innovative their products course can partners be customers of

to seek to our partners As need and objectives can ahead curve. we nimble achieve so the stay that the of

continued been a We to TJX excited continue has now renew over for partnerships. our This provide Including and and win with very innovative key we're Company. to have products years renewal TJX to partnership to XX financing customers. valuable recent

and programs the XX Sutherlands programs We JCB other Daniels quarter including and Ochsner during also Health. new renewed including Shop added four HQ, and

reach innovative to serve a Our needs broad ways and of course the and across their utilizes strategy of effectively scalable lifecycle. go-to-market over spectrum and financing industries customers in

technology offer of harnesses designed specifically with products outcomes. proprietary customized digital data our partners a delivering appropriately aligned a economic our in cutting-edge platform although their suite built have We mind, and analytics, that capabilities customers to

leverage capabilities five, our organization creation our to from will and the sales platforms growth partners sustainable a the products us company partners profitable more and reorganization and for Our for into recent business our growth redistribution of business. of deliver and optimized these swifter, better allow resources which a included three

products home lifetime auto organic growth trends customer achieve a financing back our landscape capabilities we In the Synchrony's evolves. by our focus a all combination been three. case business to our when propositions for going of within of adapting our the to and the digital expand of more suite home as deploying to platform started particular purchases. inception harness expand expect to our fact partnerships have of we reach In appliance providing will by value driven platform each value, be of our In utilizing to

contractors From platform merchants broadened Today this reach. to of home of big retailers significantly distribution the and scope points Over sector and provides of merchants and customer roofing our each spectrum has platform expanded independent dealers about and we’ve windows, and market. in Synchrony Including solutions broad across accessories, financing all and bedding, locations and appliances, XX,XXX penetrated flooring. the furniture to mattresses HVAC our industries. across and years the home the OEMs

to is expertise, and digital length seamless we Our over are breadth industry years average rooted evolve a partnerships are XX customer XX they in outcomes. because able customized partner’s over experiences as needs that deeply The to mutually time. beneficial our and capabilities products, strategic economic data-driven partners innovative of top deliver financing of each objectives are

and With customer living machine. our the to upgrade of they're partners repeat and enable to About our each insights a to strategies. customers value partners merchant analytics data they consistently own XX% need optimize support marketing, suite with purchase are financing our when through seek suited the room Our looking a needs suddenly the new those our or that combined customer of are the is expertise couch are provides washing acquisition of that data their their and in find considering. as products best clear. particular sales We purchases. to of customers And sales empowers their to themselves options variety

been digital assets. loyalty, we’ve or enhance of to whether entrusted adoption customer volume assure drive retailers transaction So our

has home market. the enabled growth steady strategy Our across

with the a prior Certainly both CAGR furniture and grew decor challenges to years it the within consumer and home pandemic as each brought X% and appliances annually. Synchrony’s and by pandemic between spent has For home the electronic X% sectors opportunities. at receivables improvement, and four grew X%

their upgrade As the homes consumers and desire intensified. quarantined their in renovate or furniture homes their décor to

start billion serves In for today. fraction alone market people opportunity. an Synchrony suburban leave a As of spent the improvement that $XXX crowded XXXX industry home home metropolitan approximate represented to communities neighborhoods, increased.

ever Even as a perhaps toward Is in favor we secular as living the in to shift strong pre-pandemic of cadence, reflecting more consumers work. a their spaces normalize remote desire invest as

have our trends. platform capitalize We these well home very positioned to on

spend higher implementing market to have example, penetration, begun partnerships while of core strategic the capability to data our our enhance of the of repeat in and number financing contractors new locations which more have and apply system, to for direct-to-device deployed replace and application and our install shorten HVAC oven. acquisition their digital hands a seek sales. In and competencies direct the checkout power leverage technology to and buy underwriting We've puts retailer some the of even platform our we natural and completely the growth an device advance in a post marketing the reach we existing when that delivers We to also we lines to pandemic industry opportunities see or analytics a should in-store. of our feel is life This deepen that solution helps and deepen the repair also being windows excited home drive is scope customers better about using initiatives our they short, in which simplicity also launched as in there normalizes for in world. tailwinds certainly the are if our home opportunities

competitive our the deepen the value our in of leveraging we enhance which reach, more ways our actually are to excited innovations and we're about differentiation. customer We technological services extend offer products the and

the long-term to for continue and on customer strategy, returns With for partners, for turn experiences our driving our strong lifetime we I'll even stakeholders. value execute our we customers to As are over their greater better Brian. that, call

everyone. morning, good and Brian Thanks

quarter earlier reflected mentioned number results we Brian strong second a of achieved factors. during the As the

First and demand volume pent-up healthy consumer significant purchase growth. for spending broad-based to with savings leading

our continued quality portfolio. across strengthening credit Second

and monitor also continue across forbearance the landscape finance forbearance as to our for broader to expire closely consumer some customers industrywide We rental begins expires. portfolio as

diverse experiences of efficient merchants enable we consistent customized strong with positioning on maintain business, by our Finally customer team solutions the providers. of partners, digitally financing across and focus our our combined and while delivery portfolio execution

consumer an improving on robust healthy who spend savings to the and economic desire environment Focusing in trends. has with

savings continued rates second unemployment reached strong remained improve the high. consumer competence a quarter During consumer XX-month and to

higher levels, a spend interest second over in new account interest Payment household and strong the also cars major long-lasting from volume rate. in X last receivables accounts XX points offset about purchase consumers totaling increased the year's This and branded increase a be trends reduction reached start active which expect the volume higher in they making our on and compared improvement pre-pandemic consumer a X% accounts higher survey last quarter relative million discretionary the and second led As the purchase new since a demand payment than quarter consumer when and last gradual demonstrates is seems cards XX% accounts stronger On were Walmart, and these The to quarter elevated platforms of there year that particular. compared which in year from flat XX% $XX.X X.XX% second auto year. to diverse the And return XX% was impact primarily was last in appliances were to for from to million of XX% set a last strong of XX% of be comparing quarter. loan purchase in in prior This X% purchase first accounted XX% XXXX reflecting almost operating to fact conference second increased normalized was increase volume to charge-offs. over the trends to homes, rate to the platform spend goods largely loans. marks we contributed purchase and receivables relative in and rep XXX Including Across positive net account. months. or primarily the the quarter quarter to period year. million was XX% tailwind second and home portfolio pandemic. Average basis indicated compared to spend basis higher growth last ROCs $XXX Dual healthy and reflected six second primarily were more new was the pre-pandemic more our for board volume higher. fees amongst of manufacturing translating year-over-year volume to on June year persistently accounts of average as strong a billion result to spend receivables. XX% co levels. the excluding XX% Loan per slight in the growth the to significant purchase year, of volume the of environment for the XXXX by year-to-date. When per higher year-over-year accounted next quarter

designed this are on performance to reminder As a a better raise our share basis programs retailers portfolios performing in performance. partner risk-adjusted our share share are in

strength So are the it the seen through as three particular designed levels the quarters last reflection RSAs Synchrony’s performing is financial over of pandemic. we've and elevated

from the $XXX by We and this million environment improved rise. more losses increase continue and optimistic to lower during decreased reduced reserves business by development as generally quarter. purchase to expect RSAs loan net decreased a cost and to charge-offs performance loss marketing to income we volume our an macroeconomic due expenses higher cost. begin reflecting $X higher million loyalty an decline program quarter. credit Other With partially $XX in operational Other offset information processing employee, million

lower results. the of of value primarily environment in their the value XX% growth elective procedures. purchase platforms wellness, growth person Moving was XXXX. offset the experienced primary partially by as like XX% diversified diversified modest higher to in across a and local growth our The rates, platform by a elevated impacted platform are our payment promotional store exception up of reflected more wellness increased in Loans and and timing of closures down categories in generally slide a digital the the our lifestyle. an In goods. growth basis and payment and saw of active strength purchase receivable undergoing digital being generally local mixed growth also balance were shift become our accounts trends. volume growth as the volume reflected which all lifestyle discuss by and combination annual and lifting lifting to and yield to with elevated broad down in consumer ramp wellness driver the health confident in up prior than and volume. of interactions spend the much household active X% sheets. was continued exception across being platform in purchase consumers diversified health the I'll this in a our or a platform, of fees home Interest clothing grew The We one remaining account value been and five as we've active discretionary X and health platform on also more account the platforms a and and by increasingly net events versus restriction was and consumers the XX% generally wellness. [ph] partner platform state to have by move X Meanwhile X% health and platforms slide as year volume Both auto Average much trends due as was in restrictions significant assorted The some associated stabilization primarily launches. in digital in as by restrictions X% margin in as trends and as on the with in in trends based result recent purchase discussing. decline income consumers being lifted. purchase volume back reflected comfortable of were with of our interest

the than the balance pandemic payment and built during rate the across the of During to savings led average quarter, the combined stimulus portfolio. mark our continued impacts high higher

of rate worth nine basis second the ran shows, XX.X%. average relative quarter. than was points and from and historical for payment April June noting moderation approximately higher last XX rate our basis monthly in higher rate peak to payment March XXX basis slides to payment points points decrease XXX the at year’s the point X-year which As about XX.X% X gradual It’s

liabilities impact from about loan excess from delinquent year strong the were We performance. margin and during decreased savings resulting earning points consumers of lockdown. our cost assets yield Net of last More primarily rate by rates. XX percent payment XX of X.XX% offset by specifically, rate accounts lower slower the by The the interest improvement basis to the lower This interest which loan due the charge income XX-basis-point last this favorable liabilities elevated the of over pandemic's quarter bearing highest quarter, basis increase expect continued was trends net receivables fees margin. held driven quarter. yield. and spend interest XX.XX% as financed interest was as basis year. compared benchmark receivables a X% by in year from reflected increased X% of yield they points of impact and in over margin. to down fees the spend mix interest gradual The XXX total from during a The basis partially payment XX% credit and XX XX.XX%, year's the year net of XX.XX% point cost discretionary lower for stimulus the earlier accounted our moderation improvement interest-bearing provided driven liquidity basis interest year interest assets lower were net from continued a during XX.X% second mix receivable increase Interest on margin XX lower year the combined continue in points we earning margin points. impacted our in year [ph] to payment resulting by and XX the basis rate second impact and and the reflecting a accumulated over points reduction discussed loan to

We should to interest that the half in increasing higher to leading slowing the continue in yields believe interest and second be net margin. asset a growth fee year, to into will deployed of liquidity rates result payment and continue

credit XX. on Next, I'll our key cover trends slide

I'll start terms specific with In the of dynamics delinquency for quarter, trends.

Our year. last compared delinquency rate XX was plus X.XX% X.XX% to

X% last compared delinquency XX plus X.XX% improvements. year. delinquency Our drive trends to payment Higher was to rate continue

X.XX% our the net charge last compared off Focusing year. was rate trends, net rates on charge X.XX% off to

charge improving was over driven as quarters. by improved pattern behavior primarily rate net last in the off delinquency customer reduction trends Our several

loan receivables of was losses Our allowance for percentage XX.XX%. credit a as

have in to concerned, any our programs multiple closely not As but we're indication seen enrolls portfolio trends the portfolio roll forbearance the date. as accounts outlook a in far is as monitoring off our credit

time Our XXXX should a charge best expectation half that back net at off to begin mid-XXXX. in would in This rise being late this the is sometime translate delinquencies delinquencies XXXX. in of peak the peak

slide XX, or million I'll last million and our on pace. X% expenses in to $XXX for plan expense $XX as expenses quarter. strategic Moving remain down managing we to Overall from cover to year to cost disciplined were the reduce execute our continue

was increase XX.X% Specifically, employee, for operational the offset XX.X% by information and main driven by processing compared lower efficiency was second to increased revenue that the development negative was The ratio losses, costs. and The marketing business of quarter a from and receivables the lower offset partially resulted decrease a of last and year. reduction the impact drivers interest of is efficiency yield. a from lower partially ratio by the in expenses. combination lower This fee

Moving slide to XX.

reduction deposit strength receivables continue platform, the our the to loan our XXXX in early of higher carry Given in and in level liquidity. a and XXXX we

manage it's excess our believe we a to continue periods, higher profile during and where to While to funding level volatile appropriate. actively prudent maintain uncertain liquidity we mitigate liquidity

was As this funding shift during result our there strategy, of a in the of quarter. a mix

year. Our deposits last declined billion $X.X from

of Our XX% funding to year. compared billion. declined comprising sources and from $X.X last assets XX% Total funding resulted our end. last our sources with down X% liquidity, quarter of facilities deposits including by billion credit funding securitized equated to funding unsecured XX% was the unsecured year which XX% This of $XX.X in our at securitized and funding being comprising XX% undrawn total

the capital the we banking benefits. of take on elected noted had agencies issued rules it that primary should joint details our transition to be benefit federal by which Before two provide I position, the

it the the retained The basis Tier deferred First the the compared and of second, adjustment capital a to XX% was XXX of above X XX.X%. CECL adjustment. ratio XXX reflecting it CECL was for years X a With framework, transition last XX.X% of of The CECL quarter the points at CETX compared reserves Tier level amortize points current last XX.X% on two with capital provisioning incremental basis the transition year, ratio ratio we XX.X% under delays total XX.X% plus transition rules, year's be income. period effect and phased transition the fully to to the net for ended this an portion in the allows impact basis to last capital XX.X% under rules and year. increased the

During million to shareholders the $XXX repurchases included $XXX per a of share paid quarter, in we and $X.XX common dividend which share. stock million returned

as regularly we quarter, also programs announced approval During dividend. billion maintain our June share the a as plan well a $X.X the of to through quarterly XXXX repurchase

generates the to scalability Our amount at thanks the growth diversified utility considerable business adjusted prioritization capital, digital capabilities, a of of our attractive risk of returns. and of our suite, product

We will allow as subject an approach plan market to to take conditions shareholders and to opportunistic business performance continue any capital our our and capital returning restrictions. regulatory to

our As normalizes, exit environment capabilities we're confident and we positioning of our in and business. the the pandemic

excited results over Brian the a company from emerging turn are about We value. financial this drive for see strong call we period dynamic will we to and stronger I shareholder as to now and thoughts. back the opportunities more and final are his

Brian. Thanks

evolution has with in challenges. occasion our of the never before the been partners While to the of continued pandemic our new to environment facilitating the arise been many Synchrony world as operating in. ushered has seen presented has the company

the they truly have to We unique customer address. serve seek needs understanding partners and the we a of

almost an have in consumer financing. history XX We year

analytics of our data, with. to We achieve for our each have to targeted advanced invest amass and leverage suite, the our product in we propriety work outcomes continued comprehensive merchants

and financial been of how now results in strong I'll for to while the and the our We we also effectively to returns to that, shareholders. have the have years value back With consistently partners call open Q&A. innovation expect our have demonstrated can adapt Kathryn driving deliver for attractive investing digital to turn come

remarks. That our prepared concludes

will begin the session. We now Q&A

to limit question. to up primary participants So as I'd follow to one and ask you please yourselves one can that of we accommodate as possible, like many the

additional Relations please the call. start session. will the If after team Operator, you the questions, have available Q&A Investor be

you. Thank

We from go [Operator question our And begin will is question-and-answer session. first our ahead. now please Sanjay Sakhrani Instructions] KBW, with

morning. good Thanks,

setup benefits is coming the ones I and the the you and which tax I'm give from most what macro is with encouragement getting credits obviously indication us moving loan being for and resurgence, through mentioned there infrastructure, from just you all of growth an and other points curious think I'm question micro a the like away could stimulus you guess, Thanks. bit early us then that. just Doubles, data Brian help government consumer quite So maybe the of

Yeah hey Sanjay.

cards, where think feel I in we we're really build it matter around look, indications. our that all The so year, really retail really and growth over no to good we're spending, as on versus pretty really year bullish is broad the across you we confidence I look, five So up based. translating look across is good what continues strong platforms, think our is seeing trends on Consumer all the spend five fact into a purchase volume sales economy. XX% of platforms. XXXX, XX%

against indicator. little as we’re talked to segment The so they’re another weak what in with Saturdays booking to up growth we a on account broad X appointments of volume. the they’re no now, seeing then based as demand XX%, up really account up was across matter then, per keep X, opening just you spend. Sundays volume, not providers it’s that company. months but out, a pent practices it we’re purchase lot and the in, CareCredit, that’s per to the complaining is more positive they’re the at XXXX, And our partners, And kind So anecdotal is look this of

teams seeing to bit know lot on. as there's our to a the don't I but stores, day in just out So, Brain, that And partners, spend. and feeling every more pent talking I anecdotal you add of know the up to they’re are demand want that's if little little to a a

largest clearly would look thing to only of increased the historical consumer end the to part as saw between first down across now in in Egan line savings actions. came the back see quarter, began towards savings beginning lift happened. the that we with second That We we that here our rates, their at you stimulus that crowd is of the of I who down when bit. into averages stimulus in a the Sanjay the the Yeah, XXXX, quarter begin, banks add see with little end pandemic

in as employment those began the with enhance half back spending, the to forbearance, mortgage of as here the well increase the year. of line benefits come the some So, and auto in pattern fade clearly will as back on financial behavior in forbearances the obligations

had you portfolio. will Yeah, growth. is touched growth, a don't out tough platforms permanent that of receivables The of on had come, four Sanjay, little I we think see receivables anything payment predict, the our we five that absolutely rate is to but bit inside

X So a signs reversion the on we're cards, said in, mean to based rate. like starting I on to and we do And X will growth see think this payment that come seeing around see we're absolutely the our positive I of spend receivables out will our there some platforms quarter.

out framework are I’m they and seeing there, up, them want stand? stand how from most you just there's one clarification portfolios of to been far be I your on just that mentioned you maybe Okay, pipeline except develop in wanted the touched mean great. terms sounds of a your to a just That's a acquisition perfect, portfolio deal, just have still follow couple just that and of clarify quarter I last for that from key Wenzel, like drivers but it Thanks. Brian curious

Yeah, so start pipeline the question Sanjay. on let me

platforms of say So would new across we've opportunities. pipeline I got a good all five

with we’re looking the are couple we’re with you at most opportunities again we that that I pipeline five have and startups out to are of achieve ups the of programs bit opportunities things looking teams and great of kind and is think a benefits by pipeline are and all start eyes portfolios of a things existing or industry. trying what are fresh sign new that tell unconventional, of across bit that's we're on in creative part they platforms. for the the aligned even are certain of new programs at of reorganization I deeper our got reorg. a that And little the that set but there seeing we've exceptions some little would One getting strong a and

of Yes that with to we’re question page framework wouldn't the so I lack your confuse changing the fact again. that framework Sanjay the

at I the high We will loan half highlighted begins of think that's you to do abate the it of year, to look in rates the quarter. continued when that going payment what put impact year. the first out we've We the continue. think the back in in first half growth

volume the of share year. consistent working be designed year into and little a From how purchase with the perspective that about the to say So so I growth to the for persistency performance the back high we’ve which I the headwind know type provide elevated back the is elevated I’ll think a of I the this it's of business so. rate be those the bit what is the move the you as manages full said think when credit in remarkable following of the then more rate RSA the some see back X% company for half higher and little given year. in year. we’re same company, upside again the quarter in margins. almost payment receivable you’ll that's first bit trends given margin Really going a And of the think half back on is so largely lost will Which the it’s rate a of standpoint half it's clearly payment what credit for we and as pristine perspective will us really

Thank Jefferies. next Hecht question with is you our John from

the give of maybe an Verizon. Hey that those tell my call questions. like new us Good you how channels can programs? of kind Maybe taking activity, was it and much on thanks New just for York customer say and two us maturation new the of update Venmo from good morning

we can just any performance is the on programs, Yeah our can’t launch than generally performance specific I both going John mode, obviously break say is Venmo but well. so out better expectations would really talk in I far. so about We're the full

all program start in the fact prop of for categories. like a code, to really great and top and even feedback on of love profit was program that similarly our card we at the share well still and key our the what the ability Verizon payments we’re QR another behaving the outside so which spend is we expectations really on card it's the the XX to in - feedback ahead so products they getting That rewards intended. a we performing but be indicators it's around us definitely design, seeing just split We are look the love are and Verizon really that on will from a program’s the future. the well. spend and and that customers is Performing [indiscernible] and early good as goal of great off a great those They that this maximize and

So off for both these and think on top to programs future. a be can in XX I both like great said I start us the

spends purchase kind and could emerging of maybe what us at and and now some good pay product thanks really give market you've the - the Brian, then I'm state very of so of you interested new a the Okay, later discussion kind forth. in kind high-level in quick got buy market of is

And factors kind of the and so underwriting your changing wondering of the the quality spectrum kind competitive across for of senses kind I'm elements market? spectrum across of what the given

products do those over pay it's product we think pay I new of later in already, out pretty point offer now a provider later that service balances a offer there financing is pay there buy will billion business John, think. it’s clear every part entrants I products a at $XX the always Obviously our big now XX,XXX over equal currently great financial we space, Yeah highlighted locations. buy pay of this equal we are question on

multi-capability goal the the is multi at have of solution. our product end a day to So

time partners bad underwriting. our that's providers both offering good to stability, you the what's in and too underwriting stay of terms times. a we're really lowering in this hard to on is we the is And it which in win. to it's take this dynamics, over can they our means in strategy to to think long long-term. much bad that's all your times. ultimately winning important go Because are losing that’s what I disciplined deeper don't long risk a know And as in times contract the a rate. you’ve I you of you’re how you And underwriting. competitive been we tell protect really and good business get tell lot times been What business approval that a we’ve try time, try a going to if business certain to not in we that that standards and know the really by if do you more And consistency used value substantially others our

our operate a our taking on win And disciplined our based deeper based and business look experienced, going business we products risk. want to we just model credit win and on on based got on to not so, team. And we’ve more we capabilities, that's want partnership never how very technology,

our Don with Wells we question And have Fargo. Fandetti next from

think it And Yes, lead think versus bit payment for more little overall tax about how Brian do can a talk about in digging that little prior you July the credit higher of materiality a the versus example, will to child you you June. stimulus? bit rates raw do

Yeah thanks cash necessarily targeted there unless sure in $XXX,XXX forward said as of of influx the clearly material XXXX. being part to that's impact a is That top what it on will a July. we rates payment $XX out really been I'm not really from billion look beginning of beneficial. on a be pull not our Don. folks to Obviously an of is going necessarily have

elevation as are what of a June. saw exited seen with out rates real not have more we of We consistent we payment

really that certainly it, see so not inactive or credit we’ll later yet watch forward gets don't whether Don. a problem as becomes data this year that pull a potential to that’s and a legislature that permanent watch any and we’ll see continue permanent more I on says to So going be

all set. Okay, I’m you thank

have Don, Thanks a good day.

And we our with from Morgan Betsy have next Graseck question Stanley.

just payment cetera we’ve by loan the the speak how of first other new spending and and couple could device. had much impact? really from one just growth I'm by here of BMPL and NIM their primary you you that to payment the impacted loan the some payment away these how it’s wondering talked rates that of be some of shift any impacted been et discussing people but through their growth the Hi being questions potentially NIM is enable have seeing it might what kinds or if schemes either been that's to entrants

any let Yeah because is chime - I Betsy don’t of competitive they the to payment the but have I really Brian just - things in seeing Brian think let just sheets stronger higher point ever a attributed Betsy. I’ll I’ll driver that is this and to add competitive consumers way Brian Yes, in think balance back pressure here color we're I’ll primary that. A but some what than been are rate is Wenzel couple to

at not you products even accounts, alternative X% relative not our when up at million now seeing real and a look may accounts. that versus providers when to X.X later origination First new so products. just account buy least of at the we look new type impact XXXX, new have we’re seeing down We're pay

has pointed purchase producing that which through we’re in the is see terrific through in it coming the volume it as really put see that accumulated really kind where rates you really driving back tremendous consumer right mirror rate stimulus out is which payment against credit pressure the don't and headwind that's a credit really of is now. in flowed sometimes but we the also the Brian We savings the

it impact monitor the alternate we we So see to but players. from will an continue don't

thinking know now ok should your get deposit bit I and a pay you have I but checking mass other pure or I the people card a pay be finance on pay a surprising little is BNPL I about is shouldn’t pay-in the balance, planning the of paying be only with stirred of account the when with there [indiscernible] here the I just BNPL own products in the is, this developing deposit be look you for. funded agree from a credit you way of it’s the mean or wanted for right. instead pure when of so I different in in for that for or I you're at think not to should guess part with credit might like it regard a clearly the coming And thanks. how question be products. when for including thinking you're out in your to anticipating products offering more Great that understand but about you? we whether because

with up credit no, one I agree so, question. with great mean agree Betsy's that. another credit we Yeah, it’s product a And pay shouldn’t product we you

of Buy across I some it. I have is looking savings of said of I mind strategy. top pay as Like version later think broader of part think a all now at alternative everybody we're our products product will kind obviously right now issuers.

year. capabilities today I features We some have XX we’re balances said billion in second the out as new and rolling the half and of

nothing point strategy get our but at on touched Thank to is comment Operator want of our Shane So earlier. part at next from JPMorgan. this question with specific I multiproduct this I Rick can too you I definitely would

morning. back-to-school the spending last this for particularly you curious think the back-to-school thanks in my portfolio, years. did the impact the taking on in the Brian of changes for over with home do and of question challenges How everybody, several the light year? Hey auto you I'm job a great composition last highlighting is important

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space So less so. us see we for to longer a of period a spike it’s out tend time over spend that of and

will trend that think I in the continue paradigm. new even

and either even a Kathryn that that great me appreciate know budget not kid. is well you was because that I enough I when Got it, my clothing

our And with question Credit Orenbuch from we Moshe have next Suisse.

a in other the could you invested that believe that are those so given little BNPL on large any of BNPL to they of hoping programs and of you talk success I'm kinds specific they’re I Brian could a quite partners of about that are like? your conversations obviously thanks. with significant have your not Great, about of paying just asking whereas in kind conversations bit amount maybe a you money of but earn amount they have words kind the significant retail what partner about money

a it's so Yeah question Moshe. great

do is wouldn't are some of if think to a around lot big I look obviously they what steep they in discount merchant interchange. new when still questions it's not we pretty compared as partners at getting at demand pointed to a now willing retailers And customer buy phase our for not the pay customer you the one - product desire still look products comparison attracting our see some at for get, right, it’s and that is that products and otherwise are rate, that out I where economics. sales only they and they but some but and think believe early look a customers are that a of they where they they're later there our charge the evaluation of they pay kind of of it

better that through and much the look economically Clearly, goes at they the for they prefer private card that purchase paying would RSA the okay. say, they label We and are them bit co-brand it's on also them or card quite financially. a because a

getting these the to economic do this economic customers stop incremental I they’re terms purchases so road as and offered. and or extent believing there’s very the that think trial and it's actually still of clear out the is will that reckoning than an in new how so, they’re early that they happen products plays And down

send a we can would relationship from they is they and partners provides, lifetime like they a thing the the our of and The for to mention focus I they things hear is other well the do us card that okay, the partners for that lifecycle our because advantage years other us and by We guys five at the marketing, loyalty. been talked and offer a when over you customer, look that we measure is think partners big is promotions the last repeat lot that, is look time number our purchases a we them years. last about with promotion. that that has frankly measure a purchase, of one to about across that made ongoing we one or I as the our partners offers lot customer And do over we of let’s things things talk customized can was of that that a all

they marketing. that ability do to like So, that lifecycle

is So, our I really going the want still kind is They products with board that thing a of hear customer. relationship think to it’s this TVD the economics [ph] and across a combination out. and the they of the to have how that’s that shake loyalty other a we value But of term lot long provide.

Thank impact how little you stage of And rate, that… talk early the is comes you. payment about bit along of should I these timeframe, How what of delinquencies? it is the question like my kind the believe kind think highlighted a you that of follow with up we that normalization the just could for Wenzel, Brian back factor? is

into year, of adding we’ve the latter built now, question XXXX. Yeah, great think I about delinquencies this way Moshe, outlook kind towards credit part of think

rate fees begin So see to as come will entry back the to begin you late delinquency rise.

So, before first get that off. the will into come you charge

fees late this part benefit that, in So if latter begin to of coming portfolio. believe impact you'll year, higher yield the you see the from the

you. thank And

from next question with Barclays. Our Mark comes Devries

NIM, of liquidity Yeah, you about average also I of that the made think from percentage about and normalization a over question long-term the normalization the the to the lift the assets? yet help payment of historic had as can of kind thanks. rate both you us the

way as through second liquidity as portfolio, and had profile. been acceleration of the was of liquidity asset the in so I billion burn off clearly in the sum maturities both the Yeah, first, the some here to about that of take the so thinking growth well that able in we've funding $X let's quarter we've

into the enter continued billion half $X over back running we were excess liquidity year. the as So, of

fees which back an lift XX be have higher off will from probably from. points basis to the fee before interest so benchmark to load liquidity dashes one two back out you highlighted the XX Again, their to payment put that than come the if to take you basis see that the rates, going line. rates lift here, the late excess you which revolve points is a normal basis X.X comes the another you net a relative have If normalized XX basis from and in that’s a when out XX late points I to margin in even you'd we’ve probably probably all residual to points side, basis about XX not points residual but

realm do us continue the one indication thing in going margin say to go we’ll that the is be today we any So, to anything I’d that the portfolio measures gives be and in back the XX% is not is see that there, it but we not nothing mean that think in to the watch and has deploy excess fundamentally consumer the to liquidities just we different, here term. the there’s that we short or when really it’s they're structurally the get time that given that going

balances? about find of that just do on opposed a of to your using then lower type revolving kind to the that Brian And on do a loan product kind maybe helpful. really the on wanting what That's partners is the they've of longer lifecycle they great. your best customers, got, products question as comments offering incentives spend way to stimulate on some follow with rate fixed Okay, up

really does but large partners that by Lowe's, partners, they would that do repeat And that number meaningful. they We they’re loyalty that majority, prop. places our that’s that value way great we value purchases. really we the to Right, into the the Yeah see I drives and now. is of is, a Amazon, do X%, and a at do one at at savings incent lot time of the of when that larger of Mark, partner, particularly the I say the vary it mean, rewards, go

payment other years card that of a I number been store, thing is the most think the of default and the we've we for doing type. now partners

goes the our on that gave you very card just with focused your think have and partners even to cardholder right comes It with that it. the on X% to And drive that’s as about been and the well Again don't it. that. lifetime so something you the loyalty have relationship

checkout and assume will I correct? Okay revolving fastest products, their the that using get they

the all even Yeah, X%, card. think right, for is default, just on know the is my a lot, it’s store it, it it stores just instant get Amazon for me the don’t about my automatically I I on goes I

easiest it’s and fastest the way So, out our for certainly to check most of partners.

you. thank And

next Our Mihir from question America. is with of Bhatia Bank

question. my [indiscernible] I awards Hi you’re trending to are for portfolio [indiscernible] customers. thanks how how additive on on but your I'm emerging that’s for this while get portfolios, industries noticed going and curious we [indiscernible] to Bhatia, have try is urban many or [indiscernible] or Mihir made costs taking about if

Yeah, loyalty wasn't quality trends. your that asking cost about you're the clear

new for customer well acquisitions? portfolio Right, I wondering promotions is been that additive increasing if like for has [indiscernible] portfolio it’s the newer that more representative or done

overall higher and certainly portfolio, driving drivers I the know would loyalty way that's loyalty value the our to assets time high then costs. volume programs cost those up beginning year assets just necessarily was it's across than about in cost general because versus year of have Yeah, the Venmo, cost the loyalty see and at set portfolio have than purchase not you’re more the are to to build, so really think not the entire higher increase but you Verizon significantly year over trend of would of XXXX percent our the growth different going we’ll for the significantly because new first a

question And next Gabriele we Oppenheimer. have our Dominick from with

for you the as them? break market them much a actually different know you each and talk we Can they guys. to have Can among running have that you’ve segments the to if Hey, up decide -- differences marketing that and up new so about taking questions. you the broken thanks much new the platforms. so that's go of made in to you strategy way the this Thanks are my obviously as teams platforms far software

to more by of you Yeah, know sure reorganize so industry was reason align all. in the couple

of align by tends by capabilities align we terms and even industry or products that in and and environment integrate to into better tend the store industry. First digital capabilities important point well than to in the we offer your the we the more integrate and as products how footprint, that how the

Venmo, we technology of purely our or their digital different So, up what and example, for both and auto but SyPI technologies our that's where home apply through do inside of we their players integrating Amazon we’re integrating for one our in in digital through also right to larger pent to partners technology online than tools and buy and of environment, would some have in-store. mobile API house were and

And domains support I expertise, cetera. so ideas new just are thinking out our to to a partners the aligned at of we have to be so, these with in in were more industry they’re really relationships, and expertise other CareCredit they and two seeing, in talking product the it, by of to or -- itself. is think it CareCredit that XX sense products that really the more to made a because or get one really in it's way as of over success can trying those whether saw we more an these advantage the of replicate not capabilities, domain this segments years, reasons. products kind teams et they tell has that as products towards having been selling when different great digital the and of we're in cared get for platforms, the is industry. as to in of store than looking an in And place, different footprint, they the a well synergies And I deep lifetime been types second months that -- it primary we that the you just purely deep industry of because teams couple of they're And things the domain secret natural industry. that about build last get piece the to tend this our these

So, progress great. far really the has been

that's know average can unlikely for of you know tender share about? you the rates this whole a rest below high which you perhaps of with the because NCL RSA? be company. that not that very talk for at know be appreciate you those is the average guys. each and the second and may think about segments by might stayed numbers just longshot a roughly I -- thank you in watermark of fairly where specific in Thank share much, market the percentage the really the think great, but the And Great, and you RSA I then they quarter, what tender you the are detail of basis one if above then this is year about the on we line with for high

spend start would can our you Yeah, rate teams room tell say programs I relatively across that they we we we've of at very were can up be of mature let of and we’ve small measure are me have to penetration start what I programs those where -- each got grow on those of at. the increasing programs regardless those penetration we where question. percentage inside XX% XX%, platforms payments the inside penetration significant is each on of where platforms

even growth the on driving for tender that that partners of and they our inside measured So, more programs mature teams are embedded based our incremental get share.

in that focused So our we rate. penetration are mature very on programs even

piece to the of want that? you if second Brian Now take

we is back just you purchases earlier buying releases Yeah, next strength the know sharing I seen half back volume RSA the and the as mentioned full NCL so to in -- call two on about you only if is to that half, RSAs you how so not it. purchase the then the to the develop there oriented in and one purchases line is, off h the rate factors year there below impact ACL year you‘re are RSA really the if for focus think of be continues on rates incremental charge expect have the already X%, yield the provisional but could

elevated the but it we saw directly than the second in what should in of back -- So, dramatically we larger where we’ll are be remain from year half the quarter.

question. one we time for Operator, have more

And thank with you, Carcache is our last Bill from question Wolfe Research.

the tailwind rates a such loan payment you out, of you providing Good to the as revolve speak normalization to the outpace see starts see if to we rates, look your as growth, spending growth to a further do morning normalization can your of could that dynamic?

it Yeah, with elevated the year XXXX reached the has the changed growth to hasn't demand thought spend. we’ve up continue certainly to market clearly of our growth -- you that rate savings way going half accelerate back from of the merchants see we that domain see back you more can volumes evolved in payment to purchase purchase you are partners, heading -- one the will to will slowing again that to said and into we believe well that loan and see about a to move we've half know with that talk that buying had pent that the you volume ahead and we continue began purchase growth consumers push the loan could the if as we providers really and back

going purchase rates and the Bill you’re combine payment to a So, going I with [indiscernible] you’re to see continue moderation in elevated time. to next that the then volumes XX over think months over

in [indiscernible]. two just will the work So,

there has speak of get levels Got increasing to commentary your you any on then your it confidence, capital. you the your is about plan? to on your down this have been current can get capital decisions your and what some authorization for to but separately on and Can missed potential ability step might I there the

we’ve couple we of through Yeah, to right levels, four years. XX% point of capital down years little to from that worked first had you we back know going bit an separated the Bill GE as history I'm three, XX% a to over

take demonstrated I So, before pandemic ability capital the we've period demonstrated the months before that the $X.X in the billion ability pandemic to nine happened. -- we've the to just think

capability demonstrate we So, I the that. think and have ability to do

rates current data in used scenarios assumptions, So, authorization quarter processes I which this were With now. our ability January we we’re so first get early mechanisms a our think is December we to to a little about the -- under authorization our the confident that right the based and backwards and looking stress down bit in governments right. there talked through off regards

And So now put to there that we'll change, evaluate that for or desire continue revisit and we we shifting the our capital million $X.X on, If be execution aggressive together put is and regulated plans the to against billion we’ll by right we approved that's were slightly said. we so authorization will not to again a regards our million increase $XXX environment whether broad had restrictions far that. if executed by board. where $X.X the the as will level with which to I have the we've remaining, revisit but year and this things warrants,

And team Relations be will thank this for all The morning. any Investor have. you answer questions us available joining to further

you participation. and Thank concludes And call. thank ladies your you, this earnings for gentleman our

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