Synchrony Financial (SYF) Q4 2023 earnings summary

Executive summary

• FY2023 record purchase volume of $185B; net earnings were $2.238B, with ROA of 2.0% and ROTCE of 19.8%.

• Q4 net earnings were $440M, or $1.03 per diluted share, versus $577M and $1.26 in Q4 2022; loan receivables rose 11% to $103.0B.

• Q4 purchase volume increased 3% to $49.3B; average active accounts grew 5% to 71.5M, while new accounts declined 3% to 6.2M.

Financial highlights

• Q4 NII increased 9% to $4.466B; interest and fees on loans rose 16% to $5.3B, partly offset by higher interest expense.

• Provision for credit losses increased 50% to $1.804B; pre-tax earnings were $539M versus $741M, and net earnings were $440M versus $577M.

• Other expense rose 14% to $1.316B, including $73M of notable expenses; other income was $71M versus $30M.

• FY2023 net earnings were $2.238B versus $3.016B in FY2022; diluted EPS was $5.19 versus $6.15.

Outlook and guidance

• FY2024 guidance: loan receivables growth of 6–8%; NII of $17.5–$18.5B; net charge-offs of 5.75–6.00%; RSA/average loan receivables of 3.50–3.75%; efficiency ratio of 32.5–33.5%.

• Assumptions include broad-based purchase-volume growth, payment-rate moderation, 1.7% GDP growth and a 4.75% year-end Fed funds rate; net charge-offs expected to peak in 1H.

• Full-year framework anticipates positive operating leverage and stabilizing operational losses; guidance excludes potential CFPB late-fee rule changes.

• Pets Best sale and Ally Lending purchase were expected to close in 1Q24.