Synchrony Financial

Leading market share in U.S. private-label credit card (PLCC) industry Peer-leading, albeit declining, regulatory capital ratios Robust earnings generation through economic cycles Narrow focus on unsecured consumer credit, with a meaningful exposure to subprime borrowers Reliance on deposits raised through online and broker channels Concentration in top merchant partners Asset quality performance that is weaker than that of most peers The stable outlook on Synchrony Financial reflects S&P Global Ratings' expectation that the company will maintain a risk-adjusted capital (RAC) ratio of 7% or higher and robust regulatory capitalization over our two-year forecast horizon. We also expect the company to maintain solid financial performance and continue to diversify its funding mix. We could lower the ratings if Synchrony's capital ratios

...Outlook: Stable The stable outlook on Synchrony Financial reflects S&P Global Ratings' expectation that the company will maintain a risk-adjusted capital (RAC) ratio of 7% or higher and robust regulatory capitalization over our two-year forecast horizon. We also expect the company to maintain solid financial performance and continue to diversify its funding mix. We could lower the ratings if Synchrony's capital ratios decline so that we expect its RAC ratio to remain sustainably below 7%. In addition, we could lower the ratings if the company's asset quality deteriorates substantially or if underwriting standards degrade materially. The loss of key merchant partners could also lead to a lower rating, although we view this as a longer-term risk since Synchrony has recently extended key partnership agreements. We do not expect to upgrade Synchrony or revise the outlook to positive given the company's relatively narrow business profile, vulnerability to consumer cycles, and less favorable...

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