TransUnion (TRU) Barclays 22nd Annual Global Financial Services Conference 2024 summary

Macroeconomic and industry trends

• Consumer and household finances remain resilient but under pressure from higher rates since mid-2022, with wage increases offsetting inflation for many segments.

• Origination volumes have trended downward, especially in mortgages, which are 60% below trend, while card originations held up until recently.

• Lending activity stabilized after a difficult Q3 2023, with deposit stability among banks improving and expectations of rate cuts providing optimism.

• Refinancing opportunities are expected to increase across mortgages, auto loans, and credit cards as rates decline, benefiting both consumers and transaction volumes.

• Delinquencies have normalized to historic levels, with household leverage still manageable.

Mortgage and credit market dynamics

• Mortgage origination remains at a trough, but pricing benefits from third-party scoring and price increases have supported revenue.

• FHFA's intent to require both VantageScore and FICO scores could be a net positive, though timing and duration remain uncertain.

• The move from tri-merge to bi-merge in mortgage underwriting is paused due to concerns about data loss impacting pricing and scoring.

• Less migration to single-score underwriting than expected, resulting in less pricing pressure and outperformance in related revenue.

Portfolio resilience and diversification

• The business is now more diversified across geographies and market segments, with 14 U.S. segments and significant product diversification.

• Despite challenging conditions, organic growth of 3% was achieved, showing resilience due to diversification.

• The portfolio is considered more resilient to recession than to rising rates, with rate sensitivity being a key driver.