Synchrony Financial Continues to Post Solid Growth in Q2

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Synchrony Financial (NYSE: SYF) reported its most recent quarterly results before the markets opened on Friday. The company said it had $0.61 in earnings per share (EPS) and $3.6 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.57 in EPS and $3.59 billion in revenue. The second quarter from last year had $0.58 in EPS and $3.21 billion in revenue.

During this quarter, the company noted a few highlights as loan receivables grew $7 billion, or 11%, from the second quarter of 2016 to a total of $75 billion. At the same time, purchase volume increased 6% and strong deposit growth continued, up 14%, or $6 billion, from last year.

In terms of its sales platforms, Synchrony reported:

  • Retail card interest and fees on loans increased 12%, driven primarily by period-end loan receivables growth of 10%.
  • Payment solutions interest and fees on loans increased 14%, driven primarily by period-end loan receivables growth of 11%.
  • CareCredit interest and fees on loans increased 12%, boosted mostly by period-end loan receivables growth of 11%.

Return on assets was 2.2% and return on equity was 13.8%.

The  Stamford, Connecticut-based company had a common equity Tier 1 capital ratio Basel 3 fully-phased in of 17.2%.

Margaret Keane, president and chief executive officer of Synchrony, commented:

“Strong execution of our strategies yielded solid performance across our three sales platforms. Organic growth remains an important business driver and contributed meaningfully to this quarter’s results. Our focus on the application and development of digital innovations is yielding results as we continue to drive strong online sales volume growth and penetration. A primary funding objective for us is growing deposits, and we continued to execute on this, achieving double-digit growth again this quarter. We were pleased to announce a meaningful increase in our capital return to shareholders through dividends and share repurchases–this is a key priority, along with continued growth of the business while maintaining solid returns and a strong balance sheet.”

Shares of Synchrony were last trading up 3.6% at $30.59, with a 52-week range of $26.01 to $38.06 and a consensus analyst price target of $36.24.