Synchrony Financial Clocks Mixed Q1 Performance, Raises Provision For Credit Losses On Macroeconomic Conditions - Synchrony Finl (NYSE:SYF)

Synchrony Financial SYF net interest income for the first quarter rose 6.9% year-over-year to $4.05 billion, beating the consensus of $4.04 billion.
Purchase volume in the quarter under review rose 2.6% Y/Y to $41.56 million. It represents growth of about 11% on a core basis.
Provision for credit losses increased 147.6% to $1.29 billion, driven by higher net charge-offs, higher loan receivables, and the potential effects of industry credit contraction on the economy, compared to a reserve release in the prior-year period.
Interest and fees on loans increased 15% to $4.6 billion, driven primarily by growth in average loan receivables.
Loan receivables were $91.1 billion and increased 15%, or 16% on a Core basis.
Net interest margin decreased 58 basis points to 15.22%. The Y/Y decline is marginal as deposit betas trended better than expected in the quarter under review, balanced by higher liquidity.
Net earnings in the quarter under review plunged 35.5% Y/Y to $601 million.
The company reported adjusted earnings of $1.35 per share, down 23.7% year on year. Adjusted earnings missed the consensus of $1.46.
The company’s return on assets decreased 170 basis points to 2.3%, while efficiency ratio decreased 220 basis points to 35%.
“Looking forward, while the macroeconomic environment remains uncertain, we remain confident in our business performance and financial outlook for the remainder of this year,” said Brian Wenzel, Synchrony’s Executive Vice President and Chief Financial Officer.
Price Action: SYF shares are trading lower by 1.75% at $29.72 during the premarket session on the last check Wednesday.

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Why Synchrony Financial Shares Are Trading Lower Today