Synchrony Financial (NYSE:SYF) reported second-quarter 2026 net earnings of $885 million, or $2.59 per diluted share, as executives pointed to record purchase volume, renewed account growth and continued credit discipline during the company’s earnings call.
President and Chief Executive Officer Brian Doubles said the quarter reflected “strong momentum across our core business drivers,” with new accounts continuing to grow and average active accounts returning to growth. Purchase volume rose 8% from a year earlier to nearly $50 billion, which Doubles said was an all-time high for the company.
Purchase Volume Reaches Record Level
Doubles said growth was broad-based across Synchrony’s five sales platforms. Diversified & Value led the increase, with purchase volume up 12% from a year earlier, helped by partner expansion and higher gas sales. Digital purchase volume grew 9%, which management attributed mainly to partners with broad offerings and highly engaged customers.
Home & Auto and Lifestyle purchase volume each increased 6%. Home & Auto growth was driven by new programs, while Lifestyle benefited from new programs and strength in other apparel and goods as well as luxury. Health & Wellness purchase volume rose 2%, primarily reflecting growth in pet.
Co-branded cards, including consumer and commercial dual cards, represented 52% of total purchase volume in the quarter and grew 23% compared with last year. Doubles said the increase reflected new programs, product upgrades, broad-based spending and enhanced utility across card programs.
Executives also said discretionary spending remained resilient despite elevated fuel prices. Doubles noted that out-of-partner discretionary spending on consumer co-branded products grew in line with non-discretionary spending, with both up double digits. He cited strength in categories such as entertainment, retail and electronics.
Partner Activity Includes Lowe’s, Suzuki and Roto-Rooter
Synchrony added or renewed more than 15 partners during the quarter, including Suzuki Motor, AmeriVet and Roto-Rooter Plumbing & Water Cleanup. Doubles said the Suzuki renewal extends a 17-year relationship and continues secured installment financing through more than 700 dealers nationwide.
The AmeriVet renewal positions CareCredit as the exclusive financing partner for a network of more than 200 veterinary clinics across 37 states. Synchrony’s agreement with Roto-Rooter will provide revolving and installment financing options for essential home repairs and ongoing home care.
Doubles also highlighted Synchrony’s refreshed credit card program with DICK’S Sporting Goods, which now features 10% back in scorecard rewards on qualifying purchases. In April, Synchrony completed its acquisition of the MyLowe’s Pro Rewards American Express Card portfolio and became the issuer, adding a co-branded commercial card alongside the existing MyLowe’s Pro Rewards private label card.
Net Interest Income Rises as Funding Costs Fall
Wenzel said net interest income increased 2% to $4.6 billion, driven by higher interest and fees and lower interest expense. Interest and fees rose 1%, reflecting growth in average loan receivables, while interest expense fell 8% due to lower benchmark rates.
Synchrony’s second-quarter net interest margin was 15.08%, up 30 basis points from a year earlier but down 42 basis points sequentially. Wenzel said the year-over-year improvement reflected lower costs on interest-bearing liabilities and a higher mix of loan receivables as a percentage of interest-earning assets. Sequentially, the decline was driven primarily by lower assessed late fees and a seasonal pre-funding effect ahead of expected loan acceleration in the second half.
The company’s payment rate was 17%, about 70 basis points higher than last year and roughly 170 basis points above the pre-pandemic second-quarter average. Wenzel said the elevated rate reflected new portfolio seasoning, portfolio and product mix shifts and prior credit actions.
During the question-and-answer portion of the call, Wenzel said net interest margin was “really at the lowest point” in the second quarter and should begin to build in the second half. He said late-fee pressure should abate and loan receivables should provide a benefit as the year progresses, assuming no changes in Federal Reserve funds rates or interest rates.
Credit Trends Remain Stable
Provision for credit losses increased $55 million to $1.2 billion, primarily due to a reserve release of $163 million compared with a $265 million release in the prior year. That was partially offset by a $47 million decline in net charge-offs.
Synchrony’s net charge-off rate was 5.43%, down from 5.70% a year earlier. Wenzel said 30-plus and 90-plus delinquency rates at quarter-end were generally in line with the prior year. The allowance for credit losses as a percentage of loan receivables was 10.09%, down from 10.42% in the first quarter and 10.59% a year earlier.
Asked about the company’s longer-term return profile, Doubles said Synchrony still evaluates business decisions through the lens of long-term guidance of more than 2.5% return on assets. “Everything we’ve brought on, even smaller programs that we’ve exited because they were below our return threshold, they all kind of steer you back to that same range in terms of return,” he said.
Capital Return and 2026 Outlook
Synchrony returned $950 million to shareholders in the quarter, including $850 million of share repurchases and $100 million in common stock dividends. The company ended the quarter with about $5.7 billion remaining under its share repurchase authorization.
Wenzel said Synchrony issued $500 million of preferred stock during the quarter with a final dividend of 7.25%, adding that the company’s capital stack is “now fully developed.” Synchrony ended the quarter with a common equity tier 1 ratio of 13.2%.
The company continues to expect average active account acceleration and strong purchase volume growth in the second half of 2026. Wenzel said that growth should more than offset elevated payment rates and produce mid-single-digit growth in ending loan receivables by year-end.
Synchrony also continues to expect net interest income to grow in 2026, supported by higher average loan receivables, PPP fees and lower funding liabilities, partially offset by lower late-fee incidence and faster new account growth. The company expects full-year net charge-offs to be less than 5.5% and now projects diluted earnings per share of $9.25 to $9.50 for 2026.
In closing remarks, Doubles said demand remains strong and that Synchrony is “growing while maintaining our credit discipline, generating strong returns, and building significant long-term value for our stakeholders.”
About Synchrony Financial (NYSE:SYF)
Synchrony Financial (NYSE: SYF) is a consumer financial services company that specializes in providing point-of-sale financing and private-label, co-branded and branded credit card programs. The company serves as a payments and lending partner to retailers, digital merchants and service providers, offering consumer financing solutions designed to drive customer engagement and sales. Synchrony also operates a direct bank that offers deposit products, including savings accounts and certificates of deposit, which support its funding and customer-facing product suite.
Its core product set includes private-label and co-branded credit cards, general-purpose credit cards, installment loan programs and promotional financing options that are integrated into merchants’ checkout experiences.
