OneMain (OMF) Barclays 22nd Annual Global Financial Services Conference 2024 summary

Consumer health and credit trends

• Non-prime consumer income has kept pace with inflation, providing a larger cushion for debt service.

• Credit performance has remained steady, with gains from early 2024 holding firm.

• No impact from recent unemployment fluctuations; delinquencies remain on trend.

• Consumer confidence is showing early signs of improvement.

• Despite high prices, non-prime consumers are in decent financial shape.

Underwriting, originations, and pricing

• Underwriting remains tight with a macro overlay assuming 30% higher losses, ensuring 20% ROE.

• Originations trended up in Q2 2024 and are expected to rise year-over-year in the second half.

• Competitive environment has allowed for price increases and market share gains.

• Product innovation, such as payroll-based income verification, has improved credit quality and customer experience.

• Portfolio yield improvement depends on replacing older, lower-performing loans and the mix of new auto loans.

Product expansion and strategy

• Credit card rollout has been deliberate, with a tight credit box and unique features like line increases or APR reductions for on-time payments.

• Card adoption is strong, with high app engagement and a focus on digital experience.

• Auto finance strategy leverages existing expertise, expanded through the Foursight acquisition.

• Integration of Foursight has been smooth, with strong tech and cultural fit.

• Cross-sell (cross-buy) is viewed as upside, with early results showing high uptake and pull-through rates.