Oct 30, 2026 earnings call — Receivables growth and credit improvement
Managed receivables grew 9% year on year to $28.1 billion this quarter.
Revenue $1.4B (est $1.3B) · EPS $1.51 (est $1.56)
Key quotes
"Which helps support our confidence in lower year on year losses in the fourth quarter and into 2027."
"The growth is driven by ongoing product innovation in our personal loans business."
"In August, we raised $2.3 billion at very attractive pricing with tight spreads through 3 separate issuances on a single day."
Analyst Q&A 7
Personal loan growth and card behavior
Q (John Hecht · Jefferies): Is personal loan growth a structural market shift or share gains? And in cards, are these new or cross-sell customers and how do they ramp and use their lines?
A: Management said they do not see evidence of a structural shift and believe they are taking share through product and process improvements. They noted bank data now represents about 40% of originations, up from 30% a year ago, and pointed to digital improvements, brand strength, and disciplined expansion into auto and card. On cards, they said they launched five years ago, broadened card options, refined analytics, and see similar line-usage ramping with targeted marketing and line increase/decrease programs.
"I do not think there is necessarily a structural shift, or at least we are not seeing evidence of it." — Douglas H. Shulman (CEO·CHAIR)
Which roll rates and Foresight effect
Q (Arren Cyganovich · Truist): Which roll rates did you mean when you said roll-rate trends improve? And does adding Foresight change delinquency seasonality or explain charge-off stubbornness with more auto and card?
A: She said she is looking at year-over-year roll rates such as 30→89→90+ and 90+→loss, and that pattern started improving in Q1 and continued in Q3. On Foresight, she said cards show good trends, and including Foresight changes some dynamics but the improvements in delinquency and loss hold with and without Foresight; Foresight was slightly more prime when bought but overall performance matches expectations.
"When I look at losses, in the third quarter, as we went throughout the quarter, we also saw that year on year trend get better." — Jeannette E. Osterhout (CFO)
2027 loss path and card returns
Q (Mihir Bhatia · BofA): What gives you confidence losses normalize in 2027 and what could derail that? Do cards clear your return hurdle after the upfront reserve and why won't losses drift up as lines grow?
A: They said the path to normalized losses focuses on the consumer loan portfolio and they see reaching closer to historical loss levels in 2027, assuming a steady macro environment; major shifts in inflation or unemployment are the main risks. On cards, they said they evaluate capital generation (not CECL build) and the card book is already generating capital; cards have a different timing of revenue and losses because lines build over 9 months to a year and losses peak earlier, so they run the business for long-term cap generation.
"I mean, and when we think about getting to those historical levels, we are really focused on the consumer loan portfolio." — Jeannette E. Osterhout (CFO)
Charge-off math and reserve level
Q (Moshe Ari Orenbuch · TD Cowen): If delinquency improves 20 bps year over year, should losses improve more than that? And how should we think about reserve coverage going forward?
A: She said you can translate Q2 delinquency forward to Q4 and apply a roll rate to estimate losses; for consumer loans use about a 2.4–2.5 roll rate to convert delinquency to loss and that implies a loss improvement in the same range or slightly more. For reserves, she said they expect coverage to rise to about 11.8 in the fourth quarter, with some pressure from cards but possible long-term opportunity as the book improves; smaller changes in cards’ share can materially affect the reserve mix because card reserves are about two times consumer loan reserves.
"If you take the consumer loan delinquency, you are gonna apply more like a 2.4, 2.5 roll rate to that." — Jeannette E. Osterhout (CFO)
Why recoveries are strong
Q (Terry Ma · Barclays): What is driving strong recoveries this year, how durable are they, and what investments improved them?
A: She said recoveries increased about 15% year over year in the third quarter and the recovery ratio as a percent of ANR was about 1.56. Most improvement comes from operational and analytical changes—who calls or texts, timing of outreach—and ongoing decisions whether to hold accounts or sell them based on market economics; durability depends on continually improving those processes.
"In the third quarter, we continued to see recoveries increase about 15% year on year, and that recovery ratio that as a percent of ANR was about 1.56." — Jeannette E. Osterhout (CFO)
CapGen returns by product and reserves
Q (Deutsche Bank): What are normalized CapGen return profiles for card, personal loan, and auto? And will the reserve move to ~11.8 be driven by mix shift or higher underlying rates?
A: She said personal loans are roughly 4% to 5% CapGen ROR, auto is slightly lower (with lower losses), and cards should build over time to a run rate slightly higher than personal loans. Douglas added you must pick market niches and noted a card loss target around 15–17% to position where they want to play; she said the reserve move toward 11.8 would be driven by mix shift, not higher underlying rates.
"In terms of cap gen ROR, I can give you sort of the general model, which would be, you know, your personal loans you are going to be in the 4% to 5% range on a cap gen ROR." — Jeannette E. Osterhout (CFO)
Second-look auto loans and cards
Q (Donald Fandetti · Wells Fargo): How is second-look auto volume and credit performing, and could you apply second-look sourcing to cards?
A: He said they have a partnership with Ally and a couple of other small partners for second-look auto originations, with good application flow and loss profiles similar to their auto book. They said they could theoretically do a similar channel for cards but are not actively pursuing it because card demand is strong and their BrightWay card is resonating.
"I mean, we told you before we have a partnership with Ally where we get a second look got a couple other small ones." — Douglas H. Shulman (CEO·CHAIR)