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Synchrony Financial (SYF - Free Report) reported fourth-quarter 2021 earnings per share of $1.48, which surpassed the Zacks Consensus Estimate of $1.47 by 0.7%. The bottom line improved around 19% year over year.
Results benefited from solid growth in new accounts and a higher purchase volume. However, the same was offset to some extent by steep expenses. It also gained from solid contributions by its Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle businesses.
Synchrony Financial Price, Consensus and EPS Surprise
SYF’s net interest income increased 4.7% year over year to $3.8 billion in the quarter under review.
Other income of $167 million soared 103.7% year over year owing to a venture investment gain.
In the fourth quarter, loan receivables dipped 1.4% year over year to $80.7 billion.
Deposits amounted to $62.3 billion, sliding 1% year over year.
Provision for credit losses plunged 25% year over year to $561 million on the back of lower operational losses.
Total other expenses of $1.1 billion increased 12.2% year over year in the quarter under consideration.
Sales Platforms Update
Home & Auto period-end loan receivables grew 3.3% year over year in the fourth quarter. Purchase volume improved 12.6% year over year owing to consistent sound performances. Interest and fees on loans were up 0.4% year over year.
Digital loan receivables rose 6.5% year over year. Purchase volume climbed 22.2% year over year on the back of robust digital-based partners. Interest and fees on loans increased 5% year over year.
Diversified & Value period-end loan receivables increased 2% year over year on the back of a solid seasonal purchase volume. Purchase volume improved 25.6% year over year in the quarter under review. Interest and fees on loans declined 0.6% year over year.
Health & Wellness period-end loan receivables grew 6.9% year over year while purchase volume advanced 14.2% year over year, highlighting broad based growth across all markets. Interest and fees on loans increased 2.4% year over year.
Lifestyle period-end loan receivables improved 7.5% year over year in the third quarter, courtesy of power sports and music strength. Purchase volume inched up 5.7% year over year. Interest and fees on loans advanced 3.7% year over year.
Financial Position (as of Dec 31, 2021)
SYF exited 2021 with total assets of $95.7 billion, slipping 0.2% year over year.
Total borrowings of $14.5 billion dropped 8% year over year in the quarter under review.
SYF’s balance sheet was consistently strong during the reported quarter with total liquidity of $15.7 billion accounting for 16.4% of its total assets.
Return on assets and return on equity were 3.4% and 23%, respectively, for the fourth quarter.
Efficiency ratio expanded 400 basis points year over year to 41.1%.
Capital Deployment
During the fourth quarter, Synchrony Financial returned capital worth $1.1 billion in the form of share buybacks of $982 million and common stock dividends of $120 million.
Of the finance sector players that have reported fourth-quarter results so far, the bottom-line results of The Travelers Companies, Inc. (TRV - Free Report) and Mastercard Incorporated (MA - Free Report) beat the Zacks Consensus Estimate while that of MarketAxess Holdings Inc. (MKTX - Free Report) missed the same.
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Synchrony Financial's (SYF) Q4 Earnings Beat, Surpass Y/Y
Synchrony Financial (SYF - Free Report) reported fourth-quarter 2021 earnings per share of $1.48, which surpassed the Zacks Consensus Estimate of $1.47 by 0.7%. The bottom line improved around 19% year over year.
Results benefited from solid growth in new accounts and a higher purchase volume. However, the same was offset to some extent by steep expenses. It also gained from solid contributions by its Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle businesses.
Synchrony Financial Price, Consensus and EPS Surprise
Synchrony Financial price-consensus-eps-surprise-chart | Synchrony Financial Quote
Results in Detail
SYF’s net interest income increased 4.7% year over year to $3.8 billion in the quarter under review.
Other income of $167 million soared 103.7% year over year owing to a venture investment gain.
In the fourth quarter, loan receivables dipped 1.4% year over year to $80.7 billion.
Deposits amounted to $62.3 billion, sliding 1% year over year.
Provision for credit losses plunged 25% year over year to $561 million on the back of lower operational losses.
Total other expenses of $1.1 billion increased 12.2% year over year in the quarter under consideration.
Sales Platforms Update
Home & Auto period-end loan receivables grew 3.3% year over year in the fourth quarter. Purchase volume improved 12.6% year over year owing to consistent sound performances. Interest and fees on loans were up 0.4% year over year.
Digital loan receivables rose 6.5% year over year. Purchase volume climbed 22.2% year over year on the back of robust digital-based partners. Interest and fees on loans increased 5% year over year.
Diversified & Value period-end loan receivables increased 2% year over year on the back of a solid seasonal purchase volume. Purchase volume improved 25.6% year over year in the quarter under review. Interest and fees on loans declined 0.6% year over year.
Health & Wellness period-end loan receivables grew 6.9% year over year while purchase volume advanced 14.2% year over year, highlighting broad based growth across all markets. Interest and fees on loans increased 2.4% year over year.
Lifestyle period-end loan receivables improved 7.5% year over year in the third quarter, courtesy of power sports and music strength. Purchase volume inched up 5.7% year over year. Interest and fees on loans advanced 3.7% year over year.
Financial Position (as of Dec 31, 2021)
SYF exited 2021 with total assets of $95.7 billion, slipping 0.2% year over year.
Total borrowings of $14.5 billion dropped 8% year over year in the quarter under review.
SYF’s balance sheet was consistently strong during the reported quarter with total liquidity of $15.7 billion accounting for 16.4% of its total assets.
Return on assets and return on equity were 3.4% and 23%, respectively, for the fourth quarter.
Efficiency ratio expanded 400 basis points year over year to 41.1%.
Capital Deployment
During the fourth quarter, Synchrony Financial returned capital worth $1.1 billion in the form of share buybacks of $982 million and common stock dividends of $120 million.
Zacks Rank
Synchrony Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Of the finance sector players that have reported fourth-quarter results so far, the bottom-line results of The Travelers Companies, Inc. (TRV - Free Report) and Mastercard Incorporated (MA - Free Report) beat the Zacks Consensus Estimate while that of MarketAxess Holdings Inc. (MKTX - Free Report) missed the same.