Synchrony Financial Reports Net Earnings Decline to $757 Million for Q1 2025

Synchrony Financial reported a net earnings decline to $757 million for the three months ended March 31, 2025, down from $1.3 billion in the same period last year. This decrease was primarily attributed to a significant after-tax gain of $802 million from the sale of Pets Best in the prior year, alongside increased retailer share arrangements. The company’s net interest income rose slightly by 1.3% to $4.5 billion, driven by a reduction in interest expenses, which fell by 6.6% due to lower benchmark rates. However, total loan receivables decreased by 2.1% year-over-year to $99.6 billion, reflecting a decline in purchase volume.

In terms of operational metrics, Synchrony reported a decrease in average active accounts to 69.3 million from 71.7 million a year earlier. The company financed $40.7 billion in purchase volume during the quarter, a decline from $42.4 billion in the previous year. The over-30 day loan delinquency rate improved to 4.52%, down from 4.74% a year prior, while the net charge-off rate increased slightly to 6.38%. The allowance for credit losses increased to 10.87% of total loan receivables, up from 10.72% a year earlier, reflecting a cautious approach amid changing economic conditions.

Strategically, Synchrony completed the acquisition of Ally Financial's point-of-sale financing business in March 2024, enhancing its presence in the home improvement sector. The company also expanded its partner agreements, including renewals with Ashley HomeStores and Discount Tire, and a new partnership with Sun Country Airlines. These developments are part of Synchrony's ongoing efforts to diversify its portfolio and strengthen its market position.

Looking ahead, Synchrony remains focused on maintaining a strong liquidity position, with total deposits increasing by 1.7% to $83.4 billion as of March 31, 2025. The company has also announced a new share repurchase program of up to $2.5 billion, reflecting confidence in its capital management strategy. However, Synchrony cautions that various macroeconomic factors, including inflation and interest rates, could impact future performance, and it will continue to monitor these conditions closely.