Synchrony Financial beats profit estimates on interest income boost
Oct 24 (Reuters) - Synchrony Financial on Tuesday beat Wall Street estimates for third-quarter profit as the bank's interest income was buoyed by customers paying more on loans.
The lender's net interest income, the difference between the interest banks earn on loans and pay out on deposits, for the quarter came in at $4.36 billion, compared to $3.93 billion in the year-ago quarter.
Synchrony reported a profit of $628 million, or $1.48 per share, for the three months ended Sept. 30, compared to analysts' average estimates of $1.43, according to LSEG data.
Several U.S. regional banks have topped analysts' third-quarter profit expectations on higher interest rates following the Federal Reserve's aggressive monetary tightening to tame sticky inflation.
However, the high interest-rate environment has also increased the risk of possible loan defaults, prompting several banks to set aside more funds to cover for bad loans.
The lender recorded $1.49 billion as provision for credit losses in the quarter, compared to $929 million a year earlier.
Additionally, Synchrony expects its 2023 net interest margin to be about 15.15%, helped by higher interest rates.
Total deposits at the bank rose 14.1% to $78.1 billion in the quarter.
(Reporting by Sri Hari N S in Bengaluru; Editing by Sriraj Kalluvila)
