- Key insights: Synchrony Chief Financial Officer Brian Wenzel said at the Barclays Global Financial Services Conference that consumers' spending and payment behaviors were "holding very firm" despite inflationary pressures.
- What's at stake: Inflation has held at 3.4% for two months, and the national average price of gasoline is over a dollar more than it was this time a year ago, according to AAA.
- Forward look: Wenzel said that Synchrony would consider loosening credit on certain channels, but would likely not release any credit-loss reserves, citing uncertainty in the Iran War.
Synchrony Financial is optimistic about consumer credit, but is still approaching the future with caution.
Synchrony Chief Financial Officer Brian Wenzel said that consumers' spending and payment behaviors were "holding very firm" despite inflationary pressures.
"The consumer from a spending behavior pattern and even a payment behavior pattern is holding very firm and very consistent with the trends we saw the first part of the year," Wenzel said at the Barclays Global Financial Services Conference Monday. "From a credit standpoint, you continue to see strength. Our entry rate into delinquency is better than 2018 and 2019, which is remarkable in this period given the affordability. … Consumers are being incredibly responsible at this point in the cycle."
August delinquencies landed at 4.2%, flat from July and down 10 basis points from the same period last year, according to Synchrony's monthly credit performance report. Net charge-offs came in at 4.9%, up 20 basis points from July but down 20 basis points from August 2025.
Loan balances in August grew 2.8% year over year to $103 billion. In July, loan receivables grew at a rate of 2.3%, according to Jefferies.
"The [year-over-year] trend line has been consistently growing and accelerating over the past few months after inflecting positively year-over-year in March," Jefferies analyst John Hecht said in a research note. "We expect continued acceleration in loan growth in 2H."
Improved credit and spending growth come against the backdrop of sticky inflation and high gas prices. Inflation has held at
Synchrony has been selective about where it loosens credit following credit-tightening actions it took more than a year ago, according to Wenzel. "Some of the credit actions we continue to take are more idiosyncratic. When we see pockets of opportunity where the performance of a product, a channel, a vertical makes sense, we are continuing to widen that aperture. It's not broad based," he said.
Synchrony does not have plans to release any credit reserves due to prevailing uncertainty.
"The macro environment, while we feel good about it, while it's being constructive for the most part for the U.S. consumer even in the face of affordability, there's still downside risk," Wenzel said.
Synchrony is also bracing for an uptick in delinquencies as it marks one year of originations on its Walmart program and "the maturation of our credit actions," Wenzel said.
