Why did Synchrony's net earnings decline in the third quarter of 2026?

Net earnings fell $185 million, or 17%, to $892 million. The filing attributes this mainly to a $123 million (10%) increase in other expense, driven by higher operational losses, technology investments and marketing, and a $120 million (10%) increase in the provision for credit losses, which reflected a $30 million reserve build versus a $152 million release in the prior year. Other income also fell $22 million, or 17%, due to higher loyalty costs.

Is credit quality improving?

Based on the reported metrics, yes. Net charge-offs were 4.79% of average loan receivables versus 5.16% a year earlier, and loans 30+ days past due were 4.34% versus 4.39%. Loans 90+ days past due were 2.06% versus 2.12%. Management described delinquency trends as consistent with typical seasonality and said net charge-offs declined to a seasonal low.

What is the company's updated 2026 outlook?

The presentation lists full-year 2026 expectations of mid-single-digit ending loan receivables growth, approximately $9.50 in FY'26 EPS, and a net charge-off rate below 5.5%. It also states that the retailer share arrangement rate is expected to stay within a 4.0% to 4.5% target range and that fourth-quarter 2026 other expense is expected to be generally in line with third quarter 2026.

How strong is the company's capital position after shareholder returns?

The estimated CET1 ratio was 12.9%, compared with 14.3% a year earlier, and the Tier 1 capital ratio was 14.5%, versus 15.5%. The company returned $1.2 billion to shareholders in the quarter, including $1.1 billion of share repurchases and $110 million of common dividends, and had about $4.6 billion of remaining repurchase authorization. The filing notes that regulatory capital ratios at September 30, 2026 are preliminary.

Synchrony Financial 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 20, 2026. Cited figures are marked; the original filing is the authoritative source.

Synchrony Financial (NYSE: SYF) reported third quarter 2026 net earnings of $892 million^a, or $2.68 per diluted share, compared to $1.1 billion, or $2.86 per diluted share, in the third quarter of 2025.

Net earnings decreased $185 million^b, or 17%, primarily reflecting higher other expense of $123 million (up 10%) and a provision for credit losses that rose $120 million (up 10%) to $1.3 billion, driven by a $30 million reserve build versus a $152 million release in the prior year. Net interest income increased $89 million, or 2%, to $4.8 billion, and retailer share arrangements rose $72 million, or 7%, to $1.1 billion. Operating activity was healthy.

Purchase volume increased 8% to $49.7 billion^c, a third-quarter record, and loan receivables increased 3% to $103.3 billion. Credit metrics improved year over year, with net charge-offs at 4.79% of average loan receivables versus 5.16% a year earlier, and loans 30+ days past due at 4.34% versus 4.39%. Return on assets declined to 2.9% from 3.6%, and return on equity fell to 21.0% from 25.1%.

The estimated Common Equity Tier 1 ratio was 12.9%, down from 14.3% a year earlier, and the company returned $1.2 billion^d to shareholders, including $1.1 billion of share repurchases. Management updated its full-year 2026 outlook, which the presentation (Exhibit 99.3) lists as mid-single-digit ending loan receivables growth, approximately $9.50 of EPS, and a net charge-off rate below 5.5%. The filing also notes that the company expects other expense in the fourth quarter of 2026 to be generally in line with the third quarter.

02—Key points

Key Highlights

Net earnings of $892 million ($2.68 diluted EPS) versus $1.1 billion ($2.86) in 3Q'25; net earnings down 17%.
Purchase volume rose 8% to $49.7 billion, a record third-quarter level, with growth across all five sales platforms.
Loan receivables rose 3% to $103.3 billion; average active accounts were flat at 68.3 million.
Net charge-offs fell to 4.79% of average loan receivables from 5.16%, while the allowance for credit losses was 10.01% of period-end loan receivables.
Other expense rose 10% to $1.4 billion, driven by higher operational losses, technology investments and marketing; efficiency ratio rose to 35.9% from 32.6%.
CET1 ratio was 12.9% versus 14.3% a year earlier; the company returned $1.2 billion in capital, including $1.1 billion of share repurchases, with about $4.6 billion of repurchase authorization remaining.
Updated 2026 outlook calls for mid-single-digit ending loan receivables growth, approximately $9.50 FY'26 EPS, and a net charge-off rate below 5.5%.

03—Questions

Frequently Asked Questions

Why did Synchrony's net earnings decline in the third quarter of 2026?
Net earnings fell $185 million, or 17%, to $892 million. The filing attributes this mainly to a $123 million (10%) increase in other expense, driven by higher operational losses, technology investments and marketing, and a $120 million (10%) increase in the provision for credit losses, which reflected a $30 million reserve build versus a $152 million release in the prior year. Other income also fell $22 million, or 17%, due to higher loyalty costs.
Is credit quality improving?
Based on the reported metrics, yes. Net charge-offs were 4.79% of average loan receivables versus 5.16% a year earlier, and loans 30+ days past due were 4.34% versus 4.39%. Loans 90+ days past due were 2.06% versus 2.12%. Management described delinquency trends as consistent with typical seasonality and said net charge-offs declined to a seasonal low.
What is the company's updated 2026 outlook?
The presentation lists full-year 2026 expectations of mid-single-digit ending loan receivables growth, approximately $9.50 in FY'26 EPS, and a net charge-off rate below 5.5%. It also states that the retailer share arrangement rate is expected to stay within a 4.0% to 4.5% target range and that fourth-quarter 2026 other expense is expected to be generally in line with third quarter 2026.
How strong is the company's capital position after shareholder returns?
The estimated CET1 ratio was 12.9%, compared with 14.3% a year earlier, and the Tier 1 capital ratio was 14.5%, versus 15.5%. The company returned $1.2 billion to shareholders in the quarter, including $1.1 billion of share repurchases and $110 million of common dividends, and had about $4.6 billion of remaining repurchase authorization. The filing notes that regulatory capital ratios at September 30, 2026 are preliminary.

04—Continue

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