Synchrony returns grow in the second quarter

STAMFORD — Consumer financialservices firm Synchrony reported Friday increasing revenues and profits for the second quarter, as it continued to benefit from the expansion of its credit portfolio.

Revenues totaled about $4.2 billion, an 11 percent increase from the same period in 2018. Profits hit $853 million, compared with $696 million a year ago — a jump that reflected a $247 million reduction in the company’s reserve, due to the pending sale of its Walmart credit portfolio.

“Our focus on driving growth both organically and through new partner programs is evident in the progress made across each of our sales platforms in the second quarter,” Synchrony CEO and President Margaret Keane said in a statement. “Investing in leading digital technologies and innovative data analytics capabilities has been paramount to delivering an optimal customer experience, empowering us to grow existing programs and win new ones.”

Synchrony’s recent growth has been largely driven by its acquisition in July 2018 of PayPal’s $7.6 billion consumercredit portfolio. The company said Friday it had completed converting the PayPal Credit accounts.

With that agreement, Synchrony and PayPal extended their 14year cobranded credit card program agreement. Synchrony is now the exclusive U.S. issuer of PayPal Credit’s online consumerfinancing program through 2028, supporting its goal of becoming a major digital-payments player.

Among other key indicators, quarterly loan receivables grew 4 percent yearoveryear, to about $82 billion. Purchase volume increased 12 percent to $38 billion. Deposits expanded 11 percent to nearly $66 billion.

Net chargeoffs — which refer to debts the company does not expect to recoup — comprised 6.01 percent of loan receivables in the past quarter, compared with 5.97 percent in the same period of 2018.

Among significant deals clinched in the past quarter, Synchrony launched a partnership with Fanatics, forged an alliance with Samsung’s HVAC business and renewed another with hairrestoration specialist Bosley.

In the past quarter, Synchrony also launched an Amazonbranded credit card and named a new president and chief financial officer.

The company also approved up to $4 billion in share repurchases and approved an increase in the quarterly dividend to 22 cents per share, up from 21 cents in the past quarter.

Synchrony shares closed Friday at about $35, down 2.8 percent from their Thursday finish.