Synchrony Financial ( SYF ) reported third-quarter 2025 net earnings of $1.1 billion, or $2.86 per diluted share, compared with $789 million, or $1.94 per share, a year earlier.

The results topped expectations, with EPS beating the $2.20 estimate and revenue of $4.72 billion exceeding the $4.69 billion forecast. Net revenue rose 0.2% year over year to $3.82 billion, while net interest income increased 2.4% to $4.72 billion.

Operational performance improved as purchase volume grew 2% to $46 billion, and the net interest margin expanded by 58 basis points to 15.62%. Loan receivables declined 2% to $100.2 billion, reflecting portfolio reclassification, while the efficiency ratio rose to 32.6%.

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Return on assets climbed to 3.6%, return on equity to 25.1%, and return on tangible common equity to 30.6%.

Credit quality strengthened, with loans 30-plus days past due at 4.39% of receivables, down 39 basis points, and net charge-offs falling 90 basis points to 5.16%.

The provision for credit losses dropped to $1.15 billion from $1.60 billion, including a $152 million reserve release versus a $44 million build last year. The release reflected improved credit performance and a $45 million reserve build tied to the pending Lowe’s commercial co-branded credit card portfolio acquisition, expected in the first half of 2026.

Synchrony maintained strong capital and liquidity. The total risk-based capital ratio was 17.0%, the CET1 ratio was 13.7%, and the Tier 1 leverage ratio was 13.0%. Cash and equivalents totaled $16.25 billion, with total liquid assets of $18.23 billion, or 15.6% of total assets.

Deposits of $79.9 billion accounted for 85% of funding, while total liquidity, including undrawn credit lines, reached $20.36 billion, or 17.4% of assets.

The company returned $971 million to shareholders during the quarter, including $861 million of buybacks and $110 million in dividends. Book value per share rose 16% to $44, and tangible book value per share increased 16% to $37.93.

The board approved an additional $1 billion repurchase authorization, raising the total available to $2.1 billion through June 2026.

“Synchrony’s third quarter performance was highlighted by a return to purchase volume growth, driven by stronger spend trends across all five of our platforms, and continued strength in our credit performance,” said President and CEO Brian Doubles.

Outlook

For fiscal 2025, Synchrony narrowed its sales outlook to $15.0 billion–$15.1 billion, down from $15.0 billion–$15.3 billion, which is below the $17.83 billion analyst estimate. The company expects flat loan receivables growth as higher payment rates offset purchase volume gains.

The net interest margin is projected to average approximately 15.7% in the second half, reflecting lower funding costs resulting from declining benchmark rates and an improved asset mix.

Retailer share arrangements are expected at 3.95%–4.05% of average receivables, net charge-offs between 5.6% and 5.7%, and an efficiency ratio of 33.0%–33.5%, with other expenses up roughly 3% year over year.

Management cited macro risks, including inflation, interest rate shifts, tariffs, and the October 2025 U.S. government shutdown, along with potential impacts from the Consumer Financial Protection Bureau’s vacated late-fee rule.

Price Action: SYF shares were trading lower by 0.47% to $72.50 premarket at last check Wednesday.

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