Synchrony Financial delivered 8.6% growth in adjusted earnings per share for 2025, driven by a 20-basis-point expansion in net interest margin, a 15% reduction in credit card charge-offs, and a $1.2 billion share repurchase program. While average loan balances remained essentially flat year-over-year, the company’s buybacks boosted return on tangible common equity to 19.5%, up from 17.8% in 2024. Efficiency improvements reduced the non-interest expense ratio to 38.2%, supporting pre-provision net revenue of $12.4 billion, a 4% increase over the prior year.

In the fourth quarter, Synchrony reported adjusted EPS of $2.47, outperforming consensus estimates by 22%, and revenue of $5.86 billion, topping projections by more than $2 billion. Net interest income rose 3.7% to $4.8 billion despite a modest decline in loan receivables, while provisions for credit losses fell 12% sequentially. Return on assets reached 1.8%, compared with 1.6% in Q4 2024, supported by higher purchase volume of $49 billion, a company record and a 3% year-over-year increase.

Synchrony’s multiproduct strategy saw Pay Later transactions lift partner sales by at least 10% when paired with revolving credit, with repeat usage emerging across more than 6,200 merchant locations. Digital engagements surged, with total digital visits up 18% and digital sales rising 17% year-over-year after enhancements to the mobile app and website. Co-brand and dual card purchase volume jumped 16%, representing roughly half of Q4 activity, while discretionary spend categories such as electronics and travel posted double-digit growth.

For fiscal 2026, Synchrony expects flat EPS as projected mid-single-digit loan growth will be offset by higher loss provisions, increased RSA program costs and limited additional margin expansion. Management forecasts net charge-off rates stabilizing around 5.8% and efficiency ratio improvements to 37.5%. However, proposed credit card rate caps at 10% present a political risk; if enacted, analysts estimate such caps could reduce annual net interest income by up to $3 billion and constrain credit availability for lower-income consumers.