01—Abstract
Summary
Summary of the 8-K filed May 15, 2024. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial furnished its monthly charge-off and delinquency statistics for the thirteen months ended April 30, 2024, under Item 7.01 (Regulation FD) of this Form 8-K, as Exhibit 99.1.
The statistics are unaudited and stated in billions of dollars. The company says the year-over-year increase in the 30+ delinquency rate and in the net charge-off rate for April 2024 reflects the continued impact of moderating customer payment rates. At April 30, 2024, period-end loan receivables were $101.6 billiona, up from $92.1 billion at April 30, 2023, and average loan receivables, including held for sale, were $101.1 billion for the month.
The 30+ delinquency rate was 4.6%b at April 30, 2024, compared with 3.7% a year earlier. The net charge-off rate for April 2024 was 6.7%, compared with 4.6% in April 2023, and the adjusted net charge-off rate, which includes the recovery adjustment, was also 6.7% versus 4.7%. Month-to-month, the net charge-off rate rose from 5.8% in January 2024 to 6.5% in February, 6.6% in March and 6.7% in April.
The company states that it intends to furnish these statistics monthly. For the last month of each calendar quarter, the statistics will be released alongside its quarterly financial results. The filing also notes that monthly charge-off figures can vary because charge-offs occur on cycle dates that differ in number from month to month, and that consumer credit card loans represent about 92%c of period-end loan receivables at April 30, 2024.
02—Key points
Key Highlights
- Period-end loan receivables were $101.6 billion at April 30, 2024, up from $92.1 billion at April 30, 2023.
- The 30+ delinquency rate was 4.6% at April 30, 2024, versus 3.7% at April 30, 2023.
- The net charge-off rate was 6.7% for April 2024, versus 4.6% for April 2023, and rose from 5.8% in January 2024 to 6.7% by April.
- The adjusted net charge-off rate, including the recovery adjustment, was 6.7% in April 2024, compared with 4.7% in April 2023.
- The company attributes the year-over-year increases in the 30+ delinquency rate and net charge-off rate to the continued impact of moderating customer payment rates.
- Consumer credit card loans represent approximately 92% of total period-end loan receivables at April 30, 2024.
- Going forward, the company will furnish these statistics monthly, with quarter-end month figures released together with quarterly earnings results.
03—Questions
Frequently Asked Questions
What do the latest credit metrics show for Synchrony's loan portfolio?
For April 2024, the 30+ delinquency rate was 4.6%, the net charge-off rate was 6.7%, and the adjusted net charge-off rate was 6.7%. All three are higher than the April 2023 levels of 3.7%, 4.6% and 4.7%, respectively.
What does the company say is driving the higher delinquency and charge-off rates?
The filing states that the year-over-year increase in the 30+ delinquency rate and in the April 2024 net charge-off rate reflects the continued impact of moderation in customer payment rates.
How large is the loan book?
Period-end loan receivables were $101.6 billion at April 30, 2024, and average loan receivables, including held for sale, were $101.1 billion for April 2024. Loan receivables were $92.1 billion at April 30, 2023.
Why can monthly charge-off figures fluctuate?
Charge-offs are executed on cycle dates that occur on various days each month, and the number of cycle dates varies with the calendar and billing cycles. The company notes that charged-off amounts can therefore change between months even when portfolio performance has not changed. Recovery adjustments also reflect allocated recoveries that may differ from actual quarterly results.
When will investors receive these statistics in the future?
The company intends to furnish these statistics monthly. For the last month of each calendar quarter, the statistics will be furnished at the same time as the company announces its quarterly financial results.
04—Continue