July 17 (Reuters) - Synchrony Financial ( SYF ) on Wednesday posted a nearly 12% rise in

second quarter net profit, driven by higher income from loans that offset an increase in the

consumer banking firm's loan loss reserves.

Credit card-focused lenders have outperformed the broader industry this year, benefiting

from gains in interest income - the difference between what a bank earns on loans and pays out

on deposits.

Customers typically pay the highest amount of interest on credit card debt, shielding

companies like Synchrony from the volatility of market and rate-sensitive lending products such

as mortgages.

Synchrony's quarterly net interest income rose to $4.41 billion up from $4.12 billion last

year.

The Stamford, Connecticut-based company's net income available to common stockholders came

in at $624 million or $1.55 per share in the three months ended June 30, compared to $559

million or $1.32 per share last year.

Meanwhile, interest rates, which have been at a multi-decadal high, have heightened the risk

of possible loan defaults, prompting companies like Synchrony to increase their loan loss

provisions.

The lender's provision for credit losses increased to $1.69 billion, up from $1.38 billion

in the year ago period.

Synchrony's purchase volume decreased by 1% to $46.8 billion, reflecting a dip in spending

on the company's credit cards amid high interest rates, as customers put off large purchases.

The company's shares gained over 9% in the reported quarter compared to a little over 2%

gain in the S&P 500 financial index during the same period.