Synchrony Financial (SYF) Q3 2023 Earnings: Net Earnings of $628 Million, $254M Capital ...
Synchrony Financial (NYSE:SYF) reports Q3 2023 net earnings of $628 million, a decrease from $703 million in Q3 2022.
Loan receivables increased 14% to $97.9 billion, with purchase volume up 5% to $47.0 billion.
The company returned $254 million of capital to shareholders, including $150 million of share repurchases.
Despite a decrease in net earnings, the company showcased strong receivables growth and record third-quarter purchase volume.
On October 24, 2023, Synchrony Financial (NYSE:SYF) released its third-quarter 2023 earnings report, showcasing a mix of strong performance and challenges. Despite a decrease in net earnings from $703 million in Q3 2022 to $628 million in Q3 2023, the company demonstrated strong receivables growth and a record third-quarter purchase volume.
Performance Overview
According to the report, Synchrony Financial (NYSE:SYF) saw a 14% increase in loan receivables to $97.9 billion and a 5% increase in purchase volume to $47.0 billion. The company returned $254 million of capital to shareholders, including $150 million of share repurchases. However, net earnings decreased to $628 million from $703 million in the same period last year.
CEO and CFO Commentary
CEO Brian Doubles commented on the company's performance, stating,
Synchrony's financial performance highlights the strength of our differentiated model and the continued resilience of our customers, who continue to gradually revert to historic spend and payment norms."
CFO Brian Wenzel echoed this sentiment, emphasizing the company's consistent growth and strong risk-adjusted returns.
Financial Highlights and Credit Quality
Interest and fees on loans increased 21% to $5.2 billion, primarily driven by growth in average loan receivables, higher benchmark rates, and a lower payment rate. However, the provision for credit losses increased to $1.5 billion, driven by higher net charge-offs and a higher reserve build. The company's credit quality continues to normalize in line with expectations, with loans 30+ days past due increasing by 112 basis points to 4.40% compared to 3.28% in the prior year.
Balance Sheet, Liquidity & Capital
SYF's balance sheet showed robust funding, capital, and liquidity. Loan receivables increased 14% to $97.9 billion, deposits increased 14% to $78.1 billion, and total liquidity was $20.5 billion. The company returned $254 million in capital to shareholders, including $150 million of share repurchases and $104 million of common stock dividends. The estimated Common Equity Tier 1 ratio was 12.4%, compared to 14.3% in the previous year.
Investors are encouraged to review the detailed financial tables and information provided in the company's earnings release and the forthcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
This article first appeared on GuruFocus.
