OneMain Holdings Reports Strong Earnings Amid Challenges

OneMain Holdings reported strong Q2 earnings, with a 63% YoY increase in capital generation, record-high receivables, and favorable credit trends. The company expects total revenue growth to be at the high end of the 6%-8% range, but anticipates moderation in originations growth in H2 and continues to face challenges in its credit card portfolio.

OneMain Holdings (OMF) reported robust second-quarter (Q2) 2025 earnings, with adjusted earnings per share (EPS) of $1.45, surpassing the Zacks Consensus Estimate of $1.25 [2]. The company's capital generation increased by 63% year-over-year (YoY) to $222 million, while managed receivables reached a record high of $25.2 billion [3].

The quarter was marked by an increase in net interest income (NII) and other revenues, with NII rising 10.8% YoY to $1.02 billion and total other revenues growing 1.1% to $176 million [2]. However, total other expenses rose 10.3% YoY to $473 million, driven by higher operating expenses and insurance policy benefits and claims [2].

OneMain Holdings' credit quality showed mixed results. The provision for finance receivable losses decreased 11.1% YoY to $511 million, while net charge-offs fell 10.3% to $445 million. However, 30-89-day delinquencies increased 2.8% YoY to $706 million, and the allowance ratio rose to 11.54% [2]. The company expects C&I net charge-offs to come in between 7.5% and 7.8% for the full year, narrowing its previous guidance [3].

The company also repurchased 460,000 shares for $21 million during the quarter, and its long-term debt increased 2.6% to $22.1 billion [2]. OneMain Holdings expects total revenue growth to be at the high end of the 6%-8% range for 2025, but anticipates moderation in originations growth in the second half (H2) of the year. The company continues to face challenges in its credit card portfolio, with management expecting improvement by 150 basis points in the second half [3].

Overall, OneMain Holdings' Q2 results reflect a strong performance, driven by growth in high-quality loan originations and positive credit trends. However, the company will need to navigate rising expenses and credit quality challenges to maintain its momentum.

References:

[1] https://investor.onemainfinancial.com/financials/quarterly-results/default.aspx
[2] https://www.nasdaq.com/articles/onemain-holdings-stock-gains-13-q2-earnings-beat-provisions-dip
[3] https://seekingalpha.com/news/4472378-onemain-narrows-2025-net-charge-off-guidance-to-7_5-percentminus-7_8-percent-amid-strong