Synchrony Financial

Strong First Quarter Results: Synchrony Financial reported net earnings of $757 million, or $1.89 per diluted share, indicating a return on average assets of 2.5% and a return on tangible common equity of 22.4%. However, net revenue decreased 23% compared to the prior year, primarily due to the absence of a significant gain from a prior year sale. Excluding that impact, net revenue was essentially flat.

Purchase Volume and Loan Growth Outlook: The company generated $41 billion in purchase volume, a 4% year-over-year decline. This was attributed to credit actions taken in prior years and a decrease in discretionary spending. The outlook anticipates low single-digit growth in loan receivables by year-end, with expectations for an improvement in purchase volume as economic conditions stabilize.

Credit Performance Improvement: Synchrony’s credit metrics demonstrated a positive trend, with 30-plus days delinquency down to 4.52% (a 22 basis point decline year-over-year) and 90-plus delinquency at 2.29% (down 13 basis points). The company’s net charge-off rate was 6.38%, showing some signs of stabilization. This gives confidence in maintaining charge-offs closer to a long-term target of 5.5% to 6%.