The following is a summary of the Bread Financial Holdings, Inc. (BFH) Q1 2024 Earnings Call Transcript:
Financial Performance:
Bread Financial reported Q1 net income of $134 million and earnings per share of $2.70.
Q1 revenue was $1.0 billion, down by 23% due to lower net fee revenue and higher interest expense.
Total net interest income decreased by 6% due to a decrease in average loans and net interest margin.
There was an increase in non-interest expense by 12% primarily due to a decrease in card and processing costs.
A decrease in parent debt level and increase in regulatory capital ratios shows a strengthened balance sheet.
The company strengthened its balance sheet by increasing its tangible book value by 20% YoY to nearly $46 per share and its direct-to-consumer deposits to $7 billion.
Business Progress:
Bread Financial has made a strategic move to improve its financial resilience by adapting its pricing to comply with the CFPB's rule changes regarding credit card late fees.
The company is managing the macroeconomic and regulatory environment while aiming to accelerate digital and technology offerings in 2024.
New techniques such as digital technology, machine learning, and bots have been utilized to enhance customer care.
Investment in technology modernization, digital advancement, and product innovation are underway to drive future growth and efficiencies.
Bread Financial Holdings has implemented pricing strategies such as the introduction of statement fees, and increases in base APRs for new transactions on existing accounts.
Despite financial challenges, the company asserts that it won't reduce the dividend.
More details: Bread Financial IR
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