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Synchrony Financial (NYSE:SYF) Q4 earnings fell less than expected as net charge-offs and its provision for credit losses moved higher, offsetting increased lending activity, according to the credit card issuer's results released on Tuesday.
The company expects FY2024 loan growth of 6%-8% (vs. 11% growth in 2023), with payment rate moderation expected to continue but to remain above prepandemic levels throughout the year. Net interest income is expected to be $17.5B-$18.5B for 2024 (compared with Visible Alpha consensus of $18.3B), net charge-off rate is anticipated to rise to 5.75%-6.00% (vs. Visible Alpha consensus of 5.86%) with NCO peaking during H1.
Synchrony (SYF) stock slipped 1.1% in Tuesday premarket trading.
Q4 purchase volume of $49.3B, missing the Visible Alpha estimate of $50.1B, climbed from $47.0B in Q3 and $47.9B in the year-ago quarter.
Q4 net charge-offs of 5.58% in Q4 rose from 4.60% in the prior quarter and 3.48% in the year-ago period.
30+ days past due delinquency rate climbed to 4.74% from 4.40% in Q3 and 3.65% in Q4 2022.
Q4 EPS of $1.03, vs. the average analyst estimate of $0.94, fell from $1.48 in Q3 and $1.26 in Q4 2022.
Net interest income increased to $4.47B, matching the Visible Alpha estimate, from $4.36B in the previous quarter and $4.11B a year ago. Net interest margin fell to 15.10% from 15.36% in Q3 and 15.58% in Q4 2022.
Provision for credit losses rose to $1.80B from $1.49B in the prior quarter and $1.20B a year ago.
Lending activity increased, with loans receivables at $103.0B at the end of the quarter, compared with $97.9B at the end of Q3. Total deposits of $81.2B increased from $78.1B at Sept. 30, 2023.
Book value per share rose to $32.36 at Dec. 31, 2023 from $31.50 at Sept. 30.
Earlier, Synchrony GAAP EPS of $1.03 beats by $0.09, revenue of $4.54B beats by $1.01B