John Pancari: And then my second question is kind of a two-parter. First on the incremental credit actions that you implemented in the third quarter, maybe just elaborate there around what exactly you did in the third quarter versus what you’ve been doing previously. And then separately, you mentioned that the RSAs are not as heavy in the health and wellness sector or business line. Can you talk about how much lower and then other product areas that may also have a lower RSA?
Brian Wenzel: So with regard to the credit actions we took a lot of it is around originations, but not around necessarily score cutoffs as much as it is different data elements or different criteria that we factor differently in account originations. We also are working on account management type actions. So triggers that comes from the bureaus of certain attributes or criteria where we would turn in a form or watch to a credit line decrease or a closed account. So those are the five, two flavors of it. Again, it’s not necessarily shifting cutoff, it’s really focusing on different criteria that are coming into our underwriting account management engine. With regard to the second part of your question on the RSAs, we just highlight, you know, health and wellness.
And I think we said it before, you know, there’s not a lot of RSA sitting in that particular sales platform. So we just, if that platform grows at a faster rate, has a little bit of an influence on the overall RSA for the Company. Outside of that, we’re not going to go into the different sales platforms from there the rest do have some level in each of the sales platforms.
Operator: Thank you. We’ll take our next question from Mihir Bhatia with Bank of America. Please go ahead.
Mihir Bhatia: I wanted to start with, just going back to the discussion around credit. You know, your credit guidance for the full year implies I think a 4Q pretty close to the 5.5%, you know, getting back to your long-term target. I was curious on how you see that evolving. I know you’ve talked about keeping underwriting pretty steady, but you’ve also tied in, we’ve seen some pretty fast normalization here in the back half of this year. Do you think it gets above your 5.5 to 6% target for a little bit in 2024 before coming back down kind of a give back from the strong years you had over the last couple of years?
Brian Wenzel: Yes, well, good morning, Mihir. The first thing I’d say, and I don’t think we’ve got enough credit for it as a company. But we still haven’t reached, and again, I know it’s seven basis points and one, we still not have reached our pre-pandemic delinquency metrics. I think there’s only a couple of issuers that are in that category. So I wouldn’t, I think we shouldn’t undersell that, number one. I think number two, when you look at the performance I’m not sure I would characterize as accelerating in the fourth quarter. If you go back and look at the growth on a dollar basis, in ‘17 and ‘18 on average, versus this, they grew on average 18 to 19% in the ‘17 to ‘18 period. And we grew, you know, in this quarter 18 to 20% on a 30 plus and 90 plus basis.
So, probably in line, I’d say with seasonality, when you look at the relative percentages, if you think about bps, they were 40 and 20 or 50 and 20 we’re 56 and a little bit over 20. So there is not, there’s not a big deterioration, I’d sit there and say, characterize it that way. You know what, as I, as we look at the performance for net charge off next year as a full year basis, one of the reasons why I think we’ve tightened a little bit here, again, given the share of consumers, we’re trying to maintain losses inside that five and a half to six and setting up the portfolio well to perform there. Cause that’s where we think the optimized risk adjusted margin is for us as a company. I know others, you know, clearly are thinking now that they’re going to, they’re willing to take a higher net charge off rate and a lower margin.
That’s not where we want to operate this company and deploy capital it’s not as effective for us. So we’re going to be disciplined around that. So again, when I look at that, and if you go back to earlier in the call, I talked about some of the vintage performance and other things that we’ve seen, it gives us, you know, some level of comfort that, that we have a pretty good view of the trajectory.
Mihir Bhatia: Got it. And then maybe just switching gears completely a little bit. I wanted to ask about the BNPL offering at Lowe’s, obviously not as topical today as maybe 12 or 24 months ago. But I think you’ve rolled it out this quarter or very recently. It looks like you are the exclusive provider for the BNPL offering there and it’s a white label, basically of the Synchrony Pay, which they’re calling lower space. So I was wondering if you could just expand on that a little bit. Just talk about what do the economics look like? Is it tied to your card offering in some way? Is this a competitive process? Is this an area you’re looking to expand and build out with other retailers? How are you thinking about that product?
Brian Doubles: Yes, sure. So maybe to start more broadly. I think this has been an area where we been investing with our partners. I think the pay later products that we offer. It’s a great way really just to engage more customers and offer them a new financing offer that’s got really nice utility. We are seeing proof that the product does provide both value to us and to our partners. If you look at the results this quarter, year-over-year, we’ve grown installment and pay later products 29%. So we’re clearly over-indexing in that product. So we can feel pretty good. I think the multiproduct strategy that we’ve been talking about for well over a year now is starting to pay off, and you’re seeing that with what we announced and launched with Lowe’s.
The lowest pay is a white label version of that. And so one of the things that’s really important to our strategy is flexibility both in terms of how we offer the product inside of our partners but flexibility to the consumer as well. So we’re willing to offer that as Synchrony pay later, and we do that for a number of partners. We’re also willing to white label it, which I think is a real competitive advantage for us because a lot of partners or a lot of competitors are not willing to do that. We’re seeing really good traction on the launch so far, and we’re just really pleased to be able to offer another product inside of our Lowe’s partnership
Operator: Thank you. We’ll take our next question from Don Fandetti with Wells Fargo. Please go ahead.
Don Fandetti: Talk a little bit more about the health of the consumer in terms of the lower end versus the higher end, and also do you feel more comfortable on one or the other based on what you’re seeing going forward?
Brian Wenzel: Yes, so I think when you look at the consumer across three different metrics, the spending metrics, the payment metrics and then obviously the credit metrics. Let me start with credit first. That consumer is the one, who is struggling. We see a little bit more of those back to pre-pandemic levels in delinquency and their performance in delinquency and then deeper non-prime performing a little bit worse. So from a credit standpoint, they get in delinquency, they don’t really have the ability to cure out of it, and are using other forms like settlements and debts that certain — debt settlement companies in order to kind of solve some of it, and that to be expected in this environment that they just don’t have as much access to liquidity.
