Synchrony Financial (SYF) Morgan Stanley US Financials, Payments & CRE Conference 2024 summary

Key strategic initiatives and business trends

• Leveraging strong capital and liquidity to accelerate strategic initiatives and support differentiated growth outlook.

• Sustained organic deposit and loan growth expected to drive net interest income expansion into 2025.

• Continued investment in revenue growth, expanding teams in new geographies and specialty verticals.

• Accelerating fee revenue streams, notably by bringing merchant acquiring in-house in H2 2024.

• Credit performance remains strong, with net charge-offs below peer median and stable outlook.

Financial outlook and guidance

• Loan growth expected between 3%-4% for 2024, exiting the year at over 5% year-over-year growth.

• Deposit growth guided to the top end of 3%-4%, with robust core deposit gathering to support future loan growth.

• Net interest income for 2024 expected to be down 1%-4%, reflecting higher funding costs and stable net interest margin.

• Fee revenue guidance unchanged, targeting 5%-7% growth for the year, with core expenses around 4.5%.

• Profitability trends expected to improve, with accelerating revenue and decelerating expense growth into 2025.

Geographic and vertical expansion

• Expanded into the Carolinas and Texas, adding over 50 bankers in the Carolinas and a new middle market team in Dallas.

• Specialty verticals such as Funds Finance, Healthcare Asset-Based Lending, and Native American Financial Services showing strong early results.

• Two new national deposit teams launched: mortgage servicing and HOA/title/escrow, each targeting $5 billion in deposits over 3-5 years.

• Expecting meaningful deposit contributions from these new teams in 2024, with pipelines already building.