Synchrony Financial's (NYSE:SYF) Q2 earnings beat consensus with purchase volume climbing from a year ago, due to government stimulus measures, easing of pandemic restrictions, and improved consumer confidence, said Chief Financial Officer Brian Wenzel.
However, customer payment rates stayed elevated due to government stimulus and industry-wide forbearance measures. "While this hindered loan receivables growth and yield, it supported continued strength in credit performance and led to lower provision for credit losses," Wenzel said.
Q2 EPS of $2.12 flies past the consensus of $1.35; compares with $1.73 in Q1 and $0.06 in Q2 2020.
Q2 provision for credit loss benefit $194M vs. cost of $334M in Q1 and $1.67B in the year-ago quarter.
Net charge-offs as a percentage of average loan receivables, including held for sale, was 3.57% vs. 3.62% in the prior quarter and 5.35% in the year-ago quarter.
Q2 net interest income fell 2% Y/Y to $3.3B, mainly from lower finance charges and late fees; net interest margin of 13.78% vs. 13.98% in Q1 and 13.53% in Q2 2020.
Q2-end loan receivables rose by $0.1B Y/Y to $78.4B; purchase volume increased by 35% Y/Y to $42.1B and average active accounts increased 2% to 65.8M.
Deposits fell 7% to $59.8B.
Expense other than interest expense and retailer share arrangements increased to $948M from $932M in Q1 and fell from $986M in the year-ago quarter.