Bread Financial (BFH) UBS Financial Services Conference 2026 summary

Consumer trends and credit quality

• Middle-income consumers have shown resilience, adapting budgets to manage post-COVID inflation of 30%-35%.

• Credit quality is improving, with expectations for continued progress through 2026 as inflation moderates and employment remains stable.

• January credit metrics met expectations; seasonal increases are anticipated but remain improved year-over-year.

• Newer loan vintages exhibit lower loss rates, contributing to a downward trend in overall credit losses.

• Tax refunds are expected to provide a tailwind, either through debt repayment or increased consumer spending.

Loan growth and business development

• Loan growth is projected in the low single digits for 2026, supported by new partner launches and stable existing partnerships.

• No inorganic growth is assumed in the outlook; growth is driven by organic expansion and improved payment rates.

• The competitive environment remains active, with a robust pipeline of partnership opportunities expected over the next one to two years.

• Buy now, pay later products are growing, now representing about 2% of outstanding loans, with further expansion anticipated through enterprise partnerships.

Revenue, expenses, and efficiency

• Pricing changes implemented since early 2024 are expected to support net interest margin through 2027, offsetting potential yield pressures.

• Operational excellence initiatives have generated tens of millions in annual savings, funding technology and AI investments.

• Positive operating leverage is targeted for 2026, with expense growth planned to remain below revenue growth.