SYF, Synchrony Financial
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A balance-sheet business, read on book value, net interest margin and credit losses rather than an earnings multiple.
- What moves the needle
- Net interest margin, loan losses, and book value. A lender is read on the quality of its balance sheet, not on an earnings multiple.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Owner’s Scorecard
Is it a good business?
- Return on equity 21%ExceptionalNet income $3.6B ÷ equity $16.8B
The bank's north star, what it earns on shareholders' capital. Cost of equity is roughly 10%, so a return durably above that builds value and below it destroys it. One year is noisy; the durability across a full credit cycle is what counts.
- ExceptionalNet income ÷ (equity − goodwill $1.4B − intangibles $1.3B)
The cleaner return, stripping out the goodwill paid for past acquisitions. This is the number a buyer of the whole bank actually earns on the hard capital.
- Efficiency ratio 27%LeanNoninterest expense $5.1B ÷ (net interest income + fees)
The share of revenue eaten by running costs; lower is better, and below about 60% marks a genuinely efficient operation. A low ratio held for years is the operational side of a moat.
Is it sound?
- Capital (equity / assets) 14.1%Well capitalizedEquity $16.8B ÷ assets $119.1B
A plain-English leverage read: how much of the balance sheet is the owners' own money. This is a rough proxy; the regulatory figure is the CET1 ratio, which is risk-weighted and reported in the filing. The point is the same, how much loss the bank can absorb before depositors are at risk.
- Deposit funding 68%Deposit-fundedDeposits $81.1B ÷ assets $119.1B
Low-cost, sticky deposits are a bank's real moat, the cheap raw material it lends out at a spread. A bank funded mostly by deposits earns more durably than one that rents its money in the wholesale market.
- Credit cost —Not enough data
Provision or net interest income missing.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
What the price implies
reverse-DCFA bank / financial isn't read on an owner-earnings DCF, its economics live on the balance sheet (book value, the return earned on it, and the cash the assets throw off). We don't force this lens where it doesn't belong.
Peers, Financial services
The same industry, side by side on the bank lens, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | ROE | ROTCE | Efficiency | Net int. margin |
|---|---|---|---|---|---|
| AXPAmerican Express Co | $41.3B | 32% | 38% | 74% | 5.8% |
| COINCoinbase Global, Inc. | $7.2B | 9% | 14% | — | — |
| SYFSynchrony Financial | — | 21% | 25% | 27% | 15.5% |