Synchrony Financial (SYF) reported a net interest income of $4.609 billion in Q3, surpassing expectations of $4.491 billion.
Net interest income grew 5.7% year-over-year due to higher loan interest and fees, despite increased interest expenses from rising rates.
Net revenue rose 9.8% to $3.814 billion, while net interest margin dropped to 15.04%. Loan receivables increased 4% to $102.2 billion, but purchase volume fell 4% to $45 billion.
Interest and fees on loans increased 7% to $5.5 billion, supported by loan growth and policy changes.
Average active accounts remained steady at 70.4 million, but deposits grew 5% to $82.3 billion.
Synchrony returned $399 million to shareholders through share buybacks and dividends.
Provision for credit losses was $1.60 billion, up $109 million from higher charge-offs.
Net earnings rose 29% to $789 million, with EPS of $1.94, outperforming the $1.81 consensus.
Return on assets increased to 2.6%, and the efficiency ratio improved to 31.2%.
Common Equity Tier 1 ratio was estimated at 13.1%, up from 12.8% last year.
During the quarter, Synchrony added over 15 programs, including partnerships with Dick’s Sporting Goods and Gibson.
FY24 Outlook: EPS is now expected to be between $8.45 – $8.55 (previously $7.60 – $7.80), assuming no late fee rule in 2024.
Stock Update: SYF shares are up 4.90% to $55.90 in premarket trading.
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