Synchrony Financial's second-quarter results: Purchase volume hits record, rising fees become a concern
Synchrony Financial's second quarter 2026 financial report released on July 21 showed that the company's core business grew strongly and set a record for the highest purchase volume in history. However, net profit fell year-on-year due to rising expenses and increased credit provisions. The financial report shows that Synchrony’s second-quarter purchases increased by 8% year-on-year, reaching a record high of nearly $50 billion. The company's CEO Brian Doubles said that this growth was due to the continued increase in new accounts, the resumption of growth in the number of active accounts, and the increase in single-account consumption on various sales platforms. Among them, co-branded cards performed particularly well, accounting for 52% of total purchases, a year-on-year increase of 23%. Loan receivables at the end of the period increased to US$102.2 billion, an increase of 2% from the same period last year. In terms of profitability, net interest income increased by 2% to US$4.6 billion, and the net interest margin expanded by 30 basis points to 15.08%, mainly benefiting from lower financing costs. However, provisions for credit losses increased by US$55 million to US$1.2 billion, and other expenses increased by 7% to US$1.3 billion, mainly due to increased technology investments and operating losses, resulting in net profit falling to US$885 million from US$967 million in the same period last year. Nonetheless, diluted earnings per share rose 4% to $2.59, above market expectations of $2.14, as the company continued to repurchase shares. In terms of credit quality, the net bad debt rate improved to 5.43% from 5.70% in the same period last year, and the overdue rates of 30 days and more than 90 days were basically the same as the same period last year. The company returned $950 million in capital to shareholders in the second quarter, including $850 million in share repurchases and $100 million in dividends. In addition, the company added or renewed more than 15 partners during the quarter, including renewals with Suzuki Motor, AmeriVet and Roto-Rooter. At the same time, Synchrony reiterated its full-year 2026 earnings per share guidance of $9.25 to $9.50 and expected the full-year net bad debt rate to be below 5.5%.