Synchrony results for the third quarter of 2026 showed record spending but lower profit, as higher credit-loss provisions and operating expenses outweighed growth in net interest income. The consumer lender reported net earnings of $892 million, or $2.68 per diluted share, on October 20, compared with $1.1 billion, or $2.86 per share, a year earlier.
Key Takeaways
- Purchase volume rose 8% to a third-quarter record of $49.7 billion.
- Net earnings fell 17% despite lower net charge-offs and higher net interest income.
- Management’s updated full-year outlook targets approximately $9.50 in diluted earnings per share.
Table of Contents
- Synchrony results reveal a gap between spending and loan growth
- Higher provisions and expenses outweigh interest income gains
- Credit improves while capital returns continue
- Annual outlook targets approximately $9.50 per share
- Conclusion
Synchrony results reveal a gap between spending and loan growth
Synchrony’s third-quarter results announcement showed loan receivables increased 3% to $103.3 billion, slower than the rise in purchase volume. Average active accounts were unchanged at 68.3 million.
Chief Executive Brian Doubles said purchase volume grew across all five sales platforms, with Generation Z and Millennial customers again delivering the highest growth. Diversified & Value led platform purchase-volume growth at 13%, followed by Home & Auto at 9%.
Stronger spending did not translate into an equivalent expansion in outstanding loans. Synchrony said higher payment rates partly offset purchase-volume growth, and management expects payment rates to remain elevated.
| Item | Details |
|---|---|
| Deposits at September 30, 2026 | $83.0 billion, up 4% year over year and representing 83% of funding |
| Total liquid assets | $19.5 billion, or 15.9% of total assets |
| Estimated common equity tier 1 ratio | 12.9%, compared with a recast 14.3% a year earlier |
| Remaining repurchase authorization | Approximately $4.6 billion at September 30, 2026 |
Higher provisions and expenses outweigh interest income gains
Net interest income increased 2% to $4.8 billion, supported by higher average loan receivables and lower funding costs. Net interest margin nevertheless declined 12 basis points to 15.50%.
The provision for credit losses rose $120 million to approximately $1.3 billion. Synchrony built reserves by $30 million, compared with a $152 million reserve release a year earlier, more than offsetting the benefit of lower net charge-offs.
Other expense increased 10% to $1.4 billion, primarily because of higher operational losses, technology investments and marketing expenses. Retailer share arrangements also increased 7% to $1.1 billion, reflecting program performance.
Credit improves while capital returns continue
Net charge-offs declined to 4.79% of average loan receivables from 5.16% a year earlier. Loans at least 30 days past due fell to 4.34% of period-end receivables from 4.39%, while the 90-day delinquency measure declined to 2.06% from 2.12%.
The improvement in realized credit losses helps explain why higher provisions should not be read as evidence that current defaults worsened: the year-over-year provision increase primarily reflected the change in reserve activity.
Synchrony returned $1.2 billion to shareholders during the quarter, including $1.1 billion in share repurchases and $110 million in common dividends.
Annual outlook targets approximately $9.50 per share
Management’s updated 2026 outlook calls for approximately $9.50 in diluted earnings per share and mid-single-digit growth in ending loan receivables. These are forecasts, not completed results.
The outlook assumes a stable macroeconomic environment, no significant change in inflation rates and no regulatory or legislative changes. Synchrony expects continued strong purchase-volume growth and fourth-quarter other expense dollars generally in line with the third quarter.
Conclusion
Synchrony’s quarter combined record third-quarter spending and better credit measures with lower profit. Its forthcoming Form 10-Q for the quarter ended September 30 will provide the next confirmed detailed filing on the period.
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