Synchrony Financial Reports $3.5 Billion Net Earnings for 2024, Driven by After-Tax Gain and Increased Net Interest Income

Synchrony Financial reported net earnings of $3.5 billion for the year ended December 31, 2024, a 56.3% increase compared to $2.2 billion in 2023. This surge was primarily attributed to an after-tax gain on the sale of Pets Best of $802 million, higher net interest income, and lower retailer share arrangements, partially offset by a rise in the provision for credit losses. Loan receivables increased by 1.7% to $104.7 billion at the end of 2024, driven by lower customer payment rates and the Ally Lending acquisition, partially offset by lower purchase volume.

Net interest income rose by 6.0% to $18.0 billion in 2024, while interest and fees on loans increased by 8.5%, mainly due to growth in average loan receivables, product, pricing, and policy changes, and lower payment rates. However, interest expense increased significantly by 24.9% due to higher benchmark rates and increased interest-bearing liabilities. Retailer share arrangements decreased by 6.9% to $3.4 billion in 2024, primarily due to higher net charge-offs, partially offset by the impact of product, pricing, and policy changes.

During 2024, Synchrony completed the acquisition of Ally Financial Inc.'s point-of-sale financing business (Ally Lending) for $2.0 billion in cash and also sold its subsidiary, Pets Best, for a combination of cash and equity in Independence Pet Holdings, Inc., resulting in a $1.1 billion gain. The company also added several new partnerships and extended existing agreements across its five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness, and Lifestyle). Two new strategic technology partnerships were also established with Adit Practice Management Software and ServiceTitan.

Operational highlights include $182.2 billion in financed purchase volume for 2024 and 71.5 million active accounts at year-end. Approximately 57% of consumer revolving applications were processed digitally in 2024. The company also repurchased $1.0 billion of its outstanding common stock and declared and paid cash dividends of $1.00 per common share. Looking ahead, Synchrony anticipates continued growth in interest and fees on loans, driven by product, pricing, and policy changes implemented in 2024, although loan receivables growth is expected to be impacted by credit actions and consumer spending behavior. The company also acknowledges uncertainty regarding the impact of the CFPB's final rule on credit card late fees, which is currently subject to legal challenge.