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Dec 31, 2023
Bread Financial Q4 2023 Earnings Report
Bread Financial's Q4 2023 earnings were released, highlighting focus on prudent growth and expense discipline.
Key Takeaways
Bread Financial reported a net income of $43 million for Q4 2023. The company's revenue was $1.017 billion, a decrease of 2% compared to Q4 2022. Diluted earnings per share from continuing operations were $0.90. The company is proactively addressing the CFPB's proposed rule on credit card late fees and remains focused on sustainable, profitable growth.
Average credit card and other loans decreased 8% year-over-year.
Revenue decreased 2% year-over-year, while net income increased $177 million.
Common equity tier 1 capital ratio increased 350 basis points year-over-year.
Tangible book value per share increased 49% year-over-year.
Bread Financial
Bread Financial
Forward Guidance
Bread Financial anticipates slower sales growth due to strategic credit tightening and moderating consumer spending, impacting loan growth and net loss rate. The outlook assumes multiple interest rate decreases by the Federal Reserve, pressuring total net interest income. The potential impacts of the proposed CFPB late fee rule are not factored in.
Positive Outlook
- Efficiency gains from technology modernization and digital advancement.
- Disciplined expense management to deliver nominal positive operating leverage.
- Commitment to mitigate the impact of potential CFPB late fee rule changes.
- Ongoing engagement with brand partners to address regulatory changes.
- Continued product diversification strategies.
Challenges Ahead
- Slower sales growth due to strategic credit tightening.
- Continued moderation in consumer spending pressuring loan growth.
- Multiple interest rate decreases by the Federal Reserve pressuring total net interest income.
- Higher gross credit losses increasing reversals of interest and fees.
- Potential significant impact from the proposed CFPB late fee rule if implemented as proposed.