Synchrony Financial profit hit by restructuring charge, higher costs

Jan 27 (Reuters) - Credit card issuer Synchrony Financial SYF.N reported a lower fourth-quarter profit on Tuesday, hit by a restructuring charge and higher expenses.

The Stamford, Connecticut-based bank's profit was $751 million, or $2.04 per share, in the three months ended December 31, compared with $774 million, or $1.91 per share, a year earlier.

Synchrony spent more on employee costs and technology investments, driving other expenses to $1.40 billion in the quarter, a 10% jump from a year earlier. That included a $67 million restructuring charge tied to a voluntary employee early-retirement program.

The results come at a turbulent time as the sector grapples with threats from U.S. President Donald Trump to cap credit card interest rates at 10%, a move JPMorgan Chase chief Jamie Dimon called "an economic disaster."

Some big banks are already considering offering credit cards with a 10% interest rate as a potential alternative to a broader cap.

After tightening lending standards in recent years, the bank saw new account and purchase volume growth slow. It began easing those standards last year and returned to purchase volume growth in the third quarter.

The firm also won back retail giant Walmart's WMT.O credit card mandate, which is expected to be a strong tailwind to growth.

"We achieved record fourth-quarter purchase volume, reflecting stronger spend growth across four of our five platforms and loan receivable growth in three of those platforms,” Chief Financial Officer Brian Wenzel said.

Purchase volume rose 3% to $49.5 billion in the fourth quarter.

As the credit card issuer for retailers like Walmart, Sam's Club, and Lowe's, Synchrony’s results offer a window into the financial health of the average American household, with middle-class purchasing power stalling even as high-income spending remains robust.

Synchrony expects 2026 profit per share to be between $9.10 and $9.50.