OneMain Holdings Inc at Barclays Global Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Terry Ma - Barclays - Analyst : Yeah. So with that brief intro, let's just maybe get started and start with the consumer. How would you characterize the health of the non-prime consumer and, in general, OneMain borrowers?

Question: Terry Ma - Barclays - Analyst : Got it. That's helpful. And then maybe just on the unemployment, right? We had a worse-than-expected trend two months ago, a slight improvement this past month. Have you seen any early signs of that impacting your borrower base?

Question: Terry Ma - Barclays - Analyst : Got it. Okay. So maybe switching gears and touching on originations. You made several rounds of tightening since August 2022. Originations in the first half of '24 were down about 7% year over year. But you also indicate that you expect strong originations in the second half. So what's driving that? And are you seeing incremental demand from borrowers? Or have you gotten more comfortable with the macro and credit performance?

Question: Terry Ma - Barclays - Analyst : Got it. Maybe then just touching on pricing. You guys have talked about being able to increase pricing and the use of data science to find pockets of growth. So can you maybe just expand on that? And then ultimately, when should we expect that pull-through to the overall portfolio yield?

Question: Terry Ma - Barclays - Analyst : Got it. That makes sense. Maybe just to switch gears in turn to each of your verticals, newer ones. Credit cards, it's currently about $460 million of receivables; the total addressable market, over $500 billion. So how has the rollout progress compared to your initial expectations in terms of adoption and just credit performance?

Question: Terry Ma - Barclays - Analyst : That's helpful color. Maybe just to turn to auto finance. It's currently about $2 billion of receivables, including Foursight. The addressable non-prime market there is about $600 billion. Can you maybe just talk about your strategy in auto and how you actually grow it?

Question: Terry Ma - Barclays - Analyst : Got it. Just touch on Foursight, you guys recently onboarded it. What are some of the key learnings or observations from the integration so far?

Question: Terry Ma - Barclays - Analyst : Okay. That's helpful. Can you talk about cross-sell? You have, obviously, your personal loan product. You have the auto product and card. Maybe just talk about how you approach cross-selling? And what's the uptake so far?

Question: Terry Ma - Barclays - Analyst : Got it. That's helpful color. I wanted to switch gears and talk about credit. This front book is becoming a bigger part of your portfolio. It's about 76% of the book. The back book is about 43% of delinquencies as of the end of the last quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, OMF.N - OneMain Holdings Inc at Barclays Global Financial Services Conference You've guided that the first half 2024 should represent peak losses. Can you maybe just talk about credit and give any color on the direction of travel and the time frame?

Question: Terry Ma - Barclays - Analyst : Got it. So I'm going to pause here and just go to the two quick audience polling questions that we have. Can we queue up the first one. So question one, do you expect OneMain's fiscal year 2025 net charge-offs to be in the range of 6.5% to 7%; two, 7% to 7.5%; three, 7.5% to 8%; or four, 8% to 8.5%? Like majority have 45%, 7% to 7.5% and then 30%, 7.5% to 8%. And we'll just go to the next one. Question two over the next year, would you expect your position in OMF to one, increase; two, decrease; or three, stay the same? 39% increased, 39% stay the same. So fairly bullish. So we have --

Question: Terry Ma - Barclays - Analyst : Okay. So we have about five to seven minutes left. I'll just open up to Q&A, if there are any questions.

Question: Terry Ma - Barclays - Analyst : Any other questions from the audience? So maybe I'll just go. So you recently acquired Foursight. And obviously, you mentioned Trim. Are there any new products, channels, or geographies you're looking to get into or even any additional bolt-on acquisition looking at thinking about longer term?

Question: Terry Ma - Barclays - Analyst : Got it. Just a few minutes left. Maybe just to wrap it up, can you touch on funding, talk about the overall liquidity profile and your funding needs over the next several years? I think your next debt maturity is in March of 2026. So how are you thinking about leverage?

Question: Terry Ma - Barclays - Analyst : Okay. Great. I think we're out of time. So thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, OMF.N - OneMain Holdings Inc at Barclays Global Financial Services Conference