Synchrony's third-quarter profit falls 17% as reserve build replaces year-ago release

Synchrony Financial's customers kept spending in the third quarter, but a swing in loan-loss reserves cut into profit. The consumer lender said Tuesday net earnings fell 17% to $892 million, or $2.68 a diluted share, from $1.1 billion, or $2.86, a year earlier.

The provision for credit losses rose $120 million, or 10%, to $1.3 billion, according to its earnings release filed with an 8-K. Synchrony said that was mainly because it built reserves by $30 million, compared with a $152 million reserve release a year ago, partly offset by $62 million lower net charge-offs.

Other expense rose 10% to $1.4 billion on higher operational losses, technology investments and marketing.

Spending and credit

Purchase volume grew 8% to $49.7 billion, with increases on all five of its sales platforms. Loan receivables rose 3% to $103.3 billion, while average active accounts held flat at 68.3 million.

"Spend reached a record third quarter level and increased across credit cohorts and generations," President and CEO Brian Doubles said in the release.

Credit metrics improved from a year ago. The net charge-off rate fell to 4.79% of average loan receivables from 5.16%, and loans 30 or more days past due dropped to 4.34% from 4.39%.

Net interest income rose 2% to $4.8 billion, but the net interest margin slipped 12 basis points to 15.50%. Retailer share arrangements climbed 7% to $1.1 billion, which the company said reflected program performance.

The Diversified & Value platform led growth, with purchase volume up 13% and period-end loan receivables up 8%. Synchrony said it added or renewed 10 partners in the quarter, including La-Z-Boy and Fender, and established a partnership with OpenAI.

Capital and outlook

Synchrony returned $1.2 billion to shareholders, including $1.1 billion of share repurchases and $110 million of common dividends, and had about $4.6 billion of repurchase authorization remaining at Sept. 30. Its estimated Common Equity Tier 1 ratio was 12.9%, compared with 14.3% a year earlier. Deposits rose 4% to $83.0 billion and made up 83% of funding.

In an updated full-year 2026 outlook in its results presentation, Synchrony projects earnings of about $9.50 a diluted share, mid-single-digit growth in ending loan receivables and a net charge-off rate below 5.5%. It expects retailer share arrangements to stay within a target range of 4.0% to 4.5% of average loan receivables.

By the numbers

• Diluted EPS: $2.68, vs. $2.86
• Net earnings: $892 million, down 17%
• Purchase volume: $49.7 billion, up 8%
• Net charge-off rate: 4.79%, vs. 5.16%
• Capital returned: $1.2 billion
• 2026 EPS outlook: about $9.50

Sources

1. Synchrony Financial, Form 8-K (Item 2.02) with Exhibit 99.1 earnings release and Exhibit 99.3 financial results presentation for the third quarter of 2026, filed Oct. 20, 2026, accession 0001601712-26-000040

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