Synchrony Financial reported Q3/15 revenue increased 9% year-on-year (YOY) to $2.7 billion while net earnings came in at $574 million, compared to $548 million for 3Q/14. Loan receivables grew $7 billion, or 12% YOY to $64 billion. Purchase Dollar Volume (PDV) increased 12% for the third quarter.
The Company. f/k/a GE Capital, is focused on completing the separation from GE. Recently, Synchrony received approval from Federal Reserve Board to become a standalone savings and loan holding company following completion of GE’s proposed exchange offer. The approval received from the Federal Reserve is a major milestone in the Synchrony’s journey towards being a fully independent company.
During the quarter Synchrony renewed PayPal, a top 10 partnership, and Sleepy’s; signed new partners – Citgo and The Container Store; expanded its network – CareCredit cards will be accepted at all Rite Aid locations nationwide; launched new programs with Guitar Center and Athleta; launched Samsung Pay for Payment Solutions and CareCredit cardholders.
Period-end loan receivables growth remained strong at 12%, primarily driven by purchase volume growth of 12% and average active account growth of 4%, and included the acquisition of the BP portfolio during the second quarter of 2015.
Return on assets was 2.9% for Q3/15 and return on equity was 19.2%. However, the net interest margin declined 114 basis points to 15.97% primarily due to the impact from the significant increase in liquidity.
Loans 30+ days past due as a percentage of period-end loan receivables improved 24 basis points to 4.02%. Net charge-offs as a percentage of total average loan receivables improved 3 basis points to 4.02%.
Retail Card platform revenue increased 10%, driven primarily by purchase volume growth of 12% and period-end loan receivables growth of 13%, which included the acquisition of the BP portfolio during the second quarter of 2015. Loan receivables growth was broad-based across partner programs.
Payment Solutions platform revenue increased 8%, driven primarily by purchase volume growth of 13% and period-end loan receivables growth of 12%. Loan receivables growth was led by home furnishing and automotive products.
CareCredit platform revenue increased 3%, driven primarily by purchase volume growth of 13% and period-end loan receivables growth of 5%, with growth led by dental and veterinary specialties.
For data, background and forecasts on Synchrony Financial: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).