Synchrony faces risks from macroeconomic conditions, partner performance, cyberattacks, and the CFPB's final rule on credit card late fees, which could significantly reduce interest and fees. The rule's uncertain implementation and potential litigation add to the uncertainty. Higher borrowing costs, potential credit rating downgrades, and the possibility of early amortization of securitization facilities also pose risks. The company's reliance on third-party vendors and international operations also present risks.
Financial Upside
Synchrony's net earnings increased in the three and nine months ended September 30, 2024, driven by higher net interest income and lower retailer share arrangements. The gain on the sale of Pets Best contributed significantly to the nine-month increase. Loan receivables increased, though purchase volume decreased, partially offset by lower customer payment rates and the Ally Lending acquisition. Deposit growth remains a source of stable, low-cost funding.
