Synchrony Financial (SYF) has reported a 14.26 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $499 million, or $0.61 a share in the quarter, compared with $582 million, or $0.70 a share for the same period last year. Revenue during the quarter went down marginally by 2.20 percent to $1,690 million from $1,728 million in the previous year period. Net interest income for the quarter rose 14.34 percent over the prior year period to $2,903 million. Non-interest income for the quarter rose 1.09 percent over the last year period to $93 million.
Synchrony Financial has made provision of $1,306 million for loan losses during the quarter, up 44.63 percent from $903 million in the same period last year.
Net interest margin improved 34 basis points to 16.18 percent in the quarter from 15.84 percent in the last year period. Efficiency ratio for the quarter improved to 30.30 percent from 30.40 percent in the previous year period. A decline in efficiency ratio indicates a rise in profitability.
"We continued to execute our business strategies which helped us generate strong organic growth in each of our sales platforms. We are augmenting organic growth with the launch of new programs and the expansion of our network, while remaining focused on the application and development of digital innovations and analytics capabilities. Furthermore, we continued strong growth in our direct deposit platform, which supports our operating objectives," said Margaret Keane, president and chief executive officer of Synchrony Financial. "We have maintained solid returns and a strong balance sheet as we continue to focus on growth and returning capital to shareholders."
Deposits stood at $51,605 million as on Mar. 31, 2017, up 14.74 percent compared with $44,977 million on Mar. 31, 2016.
Noninterest-bearing deposit liabilities were $246 million or 0.48 percent of total deposits on Mar. 31, 2017, compared with $256 million or 0.57 percent of total deposits on Mar. 31, 2016.
Investments stood at $5,328 million as on Mar. 31, 2017, up 80.67 percent or $2,379 million from year-ago. Shareholders equity was at $14,363 million as on Mar. 31, 2017.
Return on assets moved down 50 basis points to 2.30 percent in the quarter from 2.80 percent in the last year period. At the same time, return on equity decreased 400 basis points to 14.10 percent in the quarter from 18.10 percent in the last year period.
Capital ratios deteriorate Synchrony Financial witnessed a deterioration in capital ratios during in the quarter. Tier-1 leverage ratio stood at 14.80 percent for the quarter, down from 14.90 percent for the previous year quarter. Equity to assets ratio was 16.13 percent for the quarter, down from 16.17 percent for the previous year quarter. Book value per share was $17.71 for the quarter, up 11.81 percent or $1.87 compared to $15.84 for the same period last year.
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