Synchrony Financial's quarterly profit rises amid resilient consumer spending

April 21 (Reuters) - Synchrony Financial ‌reported a rise ​in ​first-quarter profit on Tuesday, as the lender was helped by resilient consumer spending at the start of the year.

Consumer ‌spending remained strong in the first couple of months of ⁠the year, underpinned by higher-income households. A Commerce Department report had highlighted strong ‌footing for the economy before ‌the U.S.-Israeli war on Iran.

But the war pushed up gasoline prices in March and stoked fresh inflation worries.

A strong spending environment helps ​companies such as Synchrony Financial — which earns revenue off the co-branded credit cards and other products it issues and services.

Net interest ⁠income — the difference between what a lender earns on loans and pays on deposits — rose ​4% to $4.6 billion in the first quarter for the consumer lender.

Credit card interest rates in the U.S. are significantly ​higher than those on mortgages or ‌auto loans, helping card issuers earn strong interest income.

U.S. President Donald Trump's proposal in January to put a ⁠one-year cap of 10% on credit card interest rates had drawn strong criticism from the banking industry, including from Synchrony Financial CEO Brian Doubles.

Synchrony's provisions ⁠for credit losses fell by $156 million to $1.3 billion in the first quarter, driven by ​lower net charge-offs.

Provisions are funds set aside by lenders to cover potential loan losses, serving as a key buffer against defaults and an indicator of how ‌they view future credit risk.

Synchrony's net income rose to $805 million, or $2.27 per share, in the three months ended ‌March 31, compared with $757 million, or $1.89 per share, a year earlier.

Shares of ⁠the company, which announced a ‌new buyback program of ​up to $6.5 billion, were up marginally in trading before the bell.

(Reporting by Pritam Biswas in Bengaluru; Editing by ‌Sahal Muhammed)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• U.S. debt tops $40 trillion
• Ant Group quarterly profits rise 1% on year
• Gains in AI company stakes juice second-quarter earnings for S&P 500