‘Consumer confidence is very strong’

STAMFORD — Synchrony, the country’s largest provider of private-label and store-brand credit cards, reported Tuesday a spike in profits and a slight drop in revenues, as company officials said they saw growing consumer confidence during the recovery from the pandemic-sparked economic downturn.

Second-quarter profits at Stamford-based Synchrony rocketed to $1.2 billion from $48 million a year ago, with the bottom line reflecting a 112 percent drop in the provision for credit losses. Quarterly revenues ticked down about 3 percent year over year to $3.3 billion, mainly due to lower financing charges and late fees.

“We’re very pleased with our performance in the second quarter,” Synchrony Chief Financial Officer Brian Wenzel told Hearst Connecticut Media. “Our products are really resonating with consumers.”

Among other key indicators, Synchrony recorded an average of nearly 66 million active accounts, up 2 percent from a year ago. In the past quarter, it originated 6 million accounts.

Synchrony Chief Financial Officer Brian Wenzel

Anthony Collins Photography 2018

The “loan receivables” balance of loans owed by customers amounted to $78 billion — about the same as last year. Customers’ purchase volume increased 35 percent to $42 billion.

In another sign of consumers’ improving finances, the net charge-off rate, which refers to debts the company does not expect to recoup, dropped from 5.35 percent to 3.57 percent.

“I think consumer confidence is very strong,” Wenzel said. “Clearly, we see it in the purchase-volume behavior and the willingness to consume. We see it, broad-based, across all aspects of our portfolio.”

Among major deals in the second quarter, Synchrony announced a multi-year renewal with TJX Companies, extending a partnership of more than 10 years with the off-price apparel and “home fashions” retailer. It renewed an additional 10 programs, including ones with Shop HQ, Mitchell Gold Co., Daniels and Sutherlands. It added four programs, with new partners including JCB and Ochsner Health.

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