Synchrony Financial (SYF): profit down 17% to $892m in Q3 as costs and reserves rose, but card spending hit a record
Synchrony, the US company behind many store and healthcare credit cards, reported third-quarter profit of $892m, down 17% from a year ago, or $2.68 per share, down 6%. Customer spending rose 8% and fewer loans were written off, but costs and money set aside for future bad loans rose.
What happened
On 20 October 2026 Synchrony Financial published results for the three months to 30 September, in a release filed with the US Securities and Exchange Commission (SEC). Net earnings, the company's profit after all costs and tax, were $892m, against $1,077m in the third quarter of 2025. Profit per diluted share, which counts every share that could exist once options are included, was $2.68 against $2.86. Synchrony issues private-label cards for retailers and health providers (including the CareCredit card) and co-branded cards such as its Venmo card. Purchase volume, the total customers spent on its cards, rose 8% to $49.7bn, a record for a third quarter, and loans owed by customers rose 3% to $103.3bn.
The company said credit quality improved: the share of its loans written off as unrecoverable fell, and late payments edged down. It also reported a fall in profit because it spent more on running the business and had to build up a reserve for future losses, where a year earlier it released one. Investing.com reported the shares down about 2% before the market opened, a preliminary move. The company also declared a quarterly dividend of $0.34 per share, payable on 16 November 2026 to holders of record on 5 November.
The numbers, explained
Start with the income the cards generate. Net interest income, the interest and fees customers pay less what Synchrony pays on deposits and other funding, rose 1.9% to $4,809m from $4,720m. Synchrony then shares part of that with its retail partners under retailer share arrangements, which rose 7.0% to $1,096m from $1,024m. Other income fell 17.3% to $105m. Revenue after these items was about $3,818m ($4,809m minus $1,096m plus $105m, our working), almost level with $3,823m a year earlier.
The fall in profit came from below that line. The provision for credit losses, the amount set aside for loans that may not be repaid, rose 10.5% to $1,266m from $1,146m. Actual write-offs were lower, down 4.8% to $1,236m, but last year the company released $152m from its reserve and this year it added $30m, a swing of $182m; $182m less the $62m fall in write-offs gives the $120m rise. Other expense rose 9.9% to $1,371m, which the company attributes to operational losses, technology and marketing. Divided by revenue, that gives an efficiency ratio of 35.9% ($1,371m / $3,818m), up from 32.6%, so costs took about 3.3 percentage points more of each dollar of revenue.
Profit before tax fell 17.4% to $1,181m from $1,429m. Tax took about 24.5% ($289m) against about 24.6% ($352m), so the tax rate did not drive the fall. Profit per share fell much less than profit, 6.3% against 17.2%, because Synchrony has bought back so many of its own shares: the average diluted share count fell 12.8%, from 369.9m to 322.4m. It returned $1.2bn to shareholders, $1.1bn of it buybacks. Its CET1 ratio, a measure of the cushion of top-quality capital held against losses, was 12.9% against 14.3% a year earlier (the prior figure was restated by the company). Figures are US dollars, GAAP (standard accounting).
Why it matters
Synchrony makes money by lending to people at the point of sale and keeping the interest and fees, funded largely by deposits ($83.0bn, up 4%). It earns well when customers spend and repay, and loses when they do not. This quarter's signals were mixed in a useful way for readers. Spending rose across all five of its sales platforms, with strong growth in Diversified & Value (+13%) and Home & Auto (+9%). The net charge-off rate, write-offs as a share of average loans, fell to 4.79% from 5.16%, and loans 30 or more days late were 4.34% against 4.39%.
A card lender's loss rates are one read on how well US households are coping. The company's own forecast, given on its call and reported by Investing.com and GuruFocus, is for 2026 profit of about $9.50 per share, at the top of its earlier $9.10 to $9.50 range, a write-off rate below 5.5% and mid-single-digit loan growth by year end. Those are company forecasts, not facts. Analysts had expected $2.42 per share for the quarter, according to Investing.com; that is an estimate, not a company figure.
What to watch next
The 10-Q, Synchrony's full quarterly report to the SEC, is described as forthcoming in the release. The dividend of $0.34 per share is payable on 16 November 2026 to holders of record on 5 November. The fourth-quarter results will be the next test of the forecasts above; the date was not stated in the sources we read. Nine-month profit per share is $7.52 against $7.22 a year earlier (+4.2%), so a $9.50 full year implies about $1.98 for the fourth quarter (our working), against $2.04 in the fourth quarter of 2025.
- Net charge-off rate: loans written off as unrecoverable, as a share of average loans
- Retailer share arrangements: payments to retail partners from card profits
- Efficiency ratio: costs divided by revenue; lower is better
- CET1 ratio: top-quality capital held against losses, as a share of risk-weighted assets
Sources
More on Synchrony Financial (SYF) · Financials takes
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