Synchrony Financial expects interest income to rise in 2024

Jan 23 (Reuters) - Synchrony Financial said on Tuesday it expects its interest income for 2024 to rise as strong consumer spending brushed aside worries about an economic slowdown.

Even as wallets tightened due to inflation and soaring interest rates, spending on the company's credit cards remained resilient.

Capitalizing on an anticipated slowdown in inflation and stabilization of interest rates, Synchrony aims to build on its current momentum and forecast its 2024 net interest income between $17.5 billion and $18.5 billion. It reported NII of about $17 billion for 2023.

The lender's interest income for the three months ended Dec. 31, rose 9% to $4.5 billion.

However, the high interest-rate environment has also increased the risk of possible loan defaults, causing Synchrony to set aside $1.8 billion as provision for credit losses.

This hurt the company's fourth-quarter profit, which fell to $1.03 per share from $1.26 per share in the year-ago quarter.

Purchase volume at Synchrony increased 3% to $49.3 billion in the quarter.

Last week, Synchrony announced that it would buy Ally Financial's point-of-sale financing business in a deal that the company expects to be accretive to its 2024 earnings.

Shares of Synchrony Financial were up 3.8% in the premarket trading. (Reporting by Sri Hari N S in Bengaluru; Editing by Shailesh Kuber)