OneMain (OMF) TD Financial Services & Fintech Summit summary

Consumer environment and outlook

• Wage growth for consumers earning $60,000–$100,000 has now matched cumulative inflation, marking an inflection point since inflation began rising.

• Despite stable employment and spending, consumers feel stressed due to higher prices and interest rates.

• Net disposable income for new loan customers is higher than in 2019, as wage increases have outpaced cost increases.

Credit and origination strategy

• Credit box was significantly tightened since mid-2022, with reduced loan sizes and increased pricing to ensure affordability and profitability.

• Unsecured loan options were limited for higher-risk customers, and a 30% stress factor was applied to loss assumptions for all new loans.

• Originations have decreased, but recent loans are performing well and meeting return targets.

Loan performance and credit losses

• Front book loans now comprise 70% of receivables and are performing in line with expectations, with lower delinquency rates than older loans.

• The company targets a 6%-7% loss rate over the next few years, depending on growth and credit environment.