In This Article:
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Net Earnings: $757 million or $1.89 per diluted share.
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Return on Average Assets: 2.5%.
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Return on Tangible Common Equity: 22.4%.
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Purchase Volume: $41 billion, down 4% year over year.
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Ending Loan Receivables: Decreased 2% to $100 billion.
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Revenue: Decreased 23% to $3.7 billion.
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Net Interest Margin: 14.74%, increased 19 basis points year over year.
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Provision for Credit Losses: Decreased to $1.5 billion.
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Other Expenses: Increased 3% to $1.2 billion.
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Efficiency Ratio: 33.4%, approximately 110 basis points higher than last year.
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30+ Delinquency Rate: 4.52%, a decline of 22 basis points from the prior year.
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Net Charge Off Rate: 6.38%, an increase of 7 basis points from the prior year.
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Allowance for Credit Losses: 10.87% of loan receivables.
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Capital Ratios: CET1 ratio of 13.2%, Tier 1 capital ratio of 14.4%, Total capital ratio of 16.5%.
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Share Repurchase Authorization: New authorization of $2.5 billion for the period ending June 30, 2026.
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Quarterly Dividend: Increased by 20% to $0.30 per common share.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Synchrony Financial (NYSE:SYF) reported strong financial performance in Q1 2025 with net earnings of $757 million, or $1.89 per diluted share.
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The company achieved a return on average assets of 2.5% and a return on tangible common equity of 22.4%.
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Synchrony engaged with approximately 70 million customers and generated $41 billion in purchase volume during the quarter.
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The company added or renewed more than 10 partners, including notable names like Sun Country Airlines and American Eagle Outfitters.
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Synchrony Financial was named the number two Best Company to Work For in the US by Fortune Magazine, highlighting its strong corporate culture.
Negative Points
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Purchase volume decreased by 4% year over year, impacted by previous credit actions and selective customer spending behavior.
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Ending loan receivables decreased by 2% to $100 billion due to lower purchase volume.
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Revenue decreased by 23% to $3.7 billion, primarily due to the impact of the Pets Best gain on sale in the prior year.
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The company's liquidity portfolio yield declined by 88 basis points, reflecting the impact of lower benchmark rates.
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Provision for credit losses decreased, but the allowance for credit losses as a percent of loan receivables increased to 10.87%.
Q & A Highlights
Q: Can you discuss the factors that led to lowering the upper end of your credit guidance and your assumptions for unemployment? A: Brian Doubles, CEO, explained that they feel positive about consumer trends and credit performance, with delinquencies improving more than expected. Brian Wenzel, CFO, added that their reserve assumptions include a 5.3% unemployment rate, and they have increased qualitative reserves to account for potential macroeconomic changes.