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Synchrony Financial (SYF) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 23, 2026
Risk Change Over Time
- Regulation - Risk 1There is ongoing uncertainty as to how about the Consumer Financial Protection Bureau's actions will role and potential impact on our business; the agency's past actions have had had, and its future actions may continue to have have, an adverse impact on our business.
The CFPB has broad authority over our business. This includes authority to write regulations under federal consumer financial protection laws and to enforce those laws against and examine large financial institutions, such as us, for compliance. The CFPB is authorized to prevent "unfair, deceptive or abusive acts or practices" through its regulatory, supervisory and enforcement authority. The Federal Reserve Board and the OCC and state government agencies may also invoke their supervisory and enforcement authorities to prevent unfair and deceptive acts or practices. These federal and state agencies are authorized to remediate violations of consumer protection laws in a number of ways, including collecting civil money penalties and fines and providing for customer restitution. The CFPB has also engaged in consumer financial education, requested data and promoted the availability of financial services to underserved consumers and communities. In addition, the CFPB has maintained an online complaint system that has allowed consumers to log complaints with respect to various consumer finance products, including the products we offer. This system could inform future CFPB decisions with respect to its regulatory, enforcement or examination focus. There is ongoing uncertainty about the CFPB's role, in light of the current administration's curtailment of much supervision, enforcement, and regulatory activity by the CFPB. Although the CFPB under the current administration has been less active in examination, enforcement, and rulemaking, future actions by the CFPB, including under future administrations, could result in requirements to alter or cease offering affected products and services, including deferred interest products, making them less attractive to consumers and less profitable to us and also restricting our ability to offer them. In addition, since 2013, the Bank has entered into two consent orders with the CFPB - in 2013 and 2014, both of which have since been terminated. The Bank's resolutions with the CFPB do not preclude the CFPB or other regulators or state attorneys general from seeking additional monetary or injunctive relief with respect to these or other issues, and any such relief could have a material adverse effect on our business, results of operations or financial condition. Although we have committed significant resources to enhancing our compliance programs, changes by the CFPB in regulatory expectations, interpretations or practices that are different from or stricter than ours or those adopted in the past by the CFPB or other regulators could increase cost of compliance, as well as the risk of additional enforcement actions, fines and penalties. Future actions by the CFPB (or other regulators) against us or our competitors that discourage the use of products we offer or suggest to consumers the desirability of other products or services could result in reputational harm and a loss of customers. If future regulatory or legislative restrictions or prohibitions are imposed that affect our ability to offer promotional financing, including deferred interest, for certain of our products or require us to make significant changes to our business practices, and we are unable to develop compliant alternatives with acceptable returns, these restrictions or prohibitions could have a material adverse impact on our business, results of operations and financial condition. The Dodd-Frank Act authorizes state officials to enforce regulations issued by the CFPB and to enforce the Act's general prohibition against unfair, deceptive or abusive acts or practices. This could make it more difficult than in the past for federal financial regulators to declare state laws that differ from federal standards to be preempted. To the extent that states enact requirements that differ from federal standards or state officials and courts adopt interpretations of federal consumer laws that differ from those adopted by the CFPB, we may be required to alter or cease offering products or services in some jurisdictions, which would increase compliance costs and reduce our ability to offer the same products and services to consumers nationwide, and we may be subject to a higher risk of state enforcement actions.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 36
- Share Price & Shareholder Rights - Risk 1Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors Synchrony Financial: Opinion on Internal Control Over Financial Reporting We have audited Synchrony Financial and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Statements of Financial Position of the Company as of December 31, 2025 and 2024, the related Consolidated Statements of Earnings, Comprehensive Income, Changes in Equity, and Cash Flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 6, 2026 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report on Management's Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP New York, New York February 6, 2026
- Share Price & Shareholder Rights - Risk 2Consolidated Statements of Changes in Equity
____________________________________________________________________________________________Preferred StockCommon Stock($ in millions, shares in thousands)Shares IssuedAmountShares IssuedAmountAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal EquityBalance at January 1, 2023750 $734 833,985 $1 $9,718 $16,716 $(125)$(14,171)$12,873 Cumulative effect of change in accounting principle-----222--222Adjusted balance, beginning of period750 $734 833,985 $1 $9,718 $16,938 $(125)$(14,171)$13,095 Net earnings- - - - - 2,238 - - 2,238 Other comprehensive income- - - - - - 57 - 57 Purchases of treasury stock- - - - - - - (1,112)(1,112)Stock-based compensation- - - - 57 (66)- 82 73 Dividends - Series A preferred stock ($56.24 per share)- - - - - (42)- - (42)Dividends - common stock ($0.96 per share)- - - - - (406)- - (406)Balance at December 31, 2023750 $734 833,985 $1 $9,775 $18,662 $(68)$(15,201)$13,903 Net earnings- - - - - 3,499 - - 3,499 Other comprehensive income- - - - - - 9 - 9 Issuance of preferred stock500 488 - - - - - - 488 Purchases of treasury stock- - - - - - - (1,008)(1,008)Stock-based compensation- - - - 78 (56)- 137 159 Dividends - Series A preferred stock ($56.24 per share)- - - - - (42)- - (42)Dividends - Series B preferred stock ($60.05 per share)- - - - - (30)- - (30)Dividends - common stock ($1.00 per share)- - - - - (398)- - (398)Balance at December 31, 20241,250 $1,222 833,985 $1 $9,853 $21,635 $(59)$(16,072)$16,580 Net earnings- - - - - 3,552 - - 3,552 Other comprehensive income- - - - - - 11 - 11 Purchases of treasury stock- - - - - - - (2,941)(2,941)Stock-based compensation- - - - 49 (79)- 104 74 Dividends - Series A preferred stock ($56.24 per share)- - - - - (42)- - (42)Dividends - Series B preferred stock ($82.52 per share)- - - - - (41)- - (41)Dividends - common stock ($1.15 per share)- - - - - (427)- - (427)Balance at December 31, 20251,250 $1,222 833,985 $1 $9,902 $24,598 $(48)$(18,909)$16,766
- Share Price & Shareholder Rights - Risk 3Note 3. Acquisitions and dispositions
Ally LendingOn March 1, 2024, we acquired Ally Financial Inc.'s point-of-sale financing business ("Ally Lending") for cash consideration of $2.0 billion. This acquisition deepened our presence and reach in the home improvement and health and wellness sectors, including high-growth specialty areas such as roofing, HVAC, and windows, as well as in cosmetic, audiology, and dentistry. The Ally Lending acquisition was accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair value as of the acquisition date. The valuation of the assets acquired and liabilities assumed was completed in 2024, and during the year ended December 31, 2024, measurement period adjustments were recognized related to the acquisition as detailed in the table below.($ in millions)Amounts Recognized as of Acquisition Date (as previously reported as of March 31, 2024)Measurement Period AdjustmentsAmounts Recognized as of Acquisition Date (as adjusted)Assets acquiredCash$34 $- $34 Loan receivables(a)1,875 (198)1,677 Intangible assets, net23 (5)18 Other assets2 - 2 Total $1,934 $(203)$1,731 Liabilities assumedOther liabilities(16)2 (14)Total net identifiable assets acquired$1,918 $(201)$1,717 Less: Total cash consideration paid1,969 - 1,969 Goodwill$51 $201 $252 _______________________(a) Loan discounts are recognized into interest income over the estimated remaining life of the acquired loans. The amounts above represent the estimated fair values of the respective assets acquired and liabilities assumed as of the date of acquisition. The estimated fair values reflect market participant assumptions about facts and circumstances that existed at the acquisition date. The measurement period adjustments reflected above did not result from events occurring subsequent to the acquisition date. The goodwill recognized related to the acquisition is tax-deductible and reflected the expected synergies and operational efficiencies arising from the transaction.The acquisition primarily included loan receivables with an unpaid principal balance of $2.2 billion. These loan receivables are reported within Consumer installment loans in Note 5. Loan Receivables and Allowance for Credit Losses. To determine the fair value of loans at acquisition, we estimated expected cash flows and discounted those cash flows using an observable market rate of interest, when available, adjusted for factors that a market participant would consider in determining fair value. In determining fair value, expected cash flows were adjusted to include prepayment, default rate, and loss severity estimates. The difference between the fair value and the amount contractually due was recorded as a loan discount or premium at acquisition. Including the impact of measurement period adjustments, the loan discount at the acquisition date was $469 million, which is amortized into interest income over the estimated remaining life of the loans, as described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies. The interest and fees related to the acquired business are included in our Consolidated Statements of Earnings subsequent to the acquisition date and totaled $320 million for the year ended December 31, 2024. This amount included amortization of the loan discount recognized at acquisition of $162 million. Expense activities, including those associated with the acquired business, are managed for the Company as a whole. Loans acquired without a more-than-insignificant credit deterioration since origination are measured under the Allowance for Credit Losses model, as described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies. The Company's best estimate of contractual cash flows not expected to be collected at the date of acquisition was $180 million, which was included within our Allowance for credit losses, and recognized through Provision for credit losses in our Consolidated Statements of Earnings for the year ended December 31, 2024.Included in the acquisition was $64 million of PCD assets that were not immediately written off at the acquisition date and were subject to specific guidance upon acquisition. An allowance for PCD assets of $39 million was recorded at the date of acquisition. Subsequent to initial recognition, the accounting for the PCD assets generally follows the Allowance for Credit Losses model described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies.Pets BestIn March 2024, we sold our wholly-owned subsidiary, Pets Best Insurance Services, LLC ("Pets Best") to Poodle Holdings, Inc. ("Buyer") for consideration comprising a combination of cash and an equity interest of less than 10% in Independence Pet Holdings, Inc., ("IPH") an affiliate of Buyer. The sale of Pets Best resulted in the recognition of a gain on sale of $1.1 billion, or $802 million, net of tax, in the three months ended March 31, 2024. The pre-tax gain amount was recognized within the Other component of Other income in our Consolidated Statements of Earnings.The Company's initial equity investment in IPH was recorded in Other assets on our Consolidated Statements of Financial Position and is accounted for under the equity method of accounting. The investment was recorded at its estimated fair value at the date acquired of $605 million. The change in the carrying value of our equity investment in IPH subsequent to the date acquired was not material.
- Share Price & Shareholder Rights - Risk 4Note 8. Deposits
DepositsAt December 31 ($ in millions)20252024Interest-bearing deposits:Money market and other demand deposits$2,837 $2,264 Savings29,777 28,605 Certificates of deposit:Direct42,229 41,055 Brokered3,316 5,891 Brokered sweep accounts2,589 3,849 Total interest-bearing deposits80,748 81,664 Total non-interest-bearing deposits396 398 Total deposits$81,144 $82,062 Certificates of DepositAt December 31, 2025, our certificates of deposit maturing over the next five years and thereafter were as follows: ($ in millions)20262027202820292030ThereafterCertificates of deposit$34,275 $5,490 $2,335 $1,186 $2,070 $189 At December 31, 2025 and 2024, direct certificates of deposit of $12.3 billion and $11.2 billion, respectively, were of denominations at or exceeding applicable FDIC insurance limits, which are generally $250,000 per depositor for each account ownership category. These amounts include partially insured certificates of deposit. At December 31, 2025 and 2024, the portion of these direct certificates of deposit estimated to be uninsured was $4.2 billion and $3.7 billion, respectively. Brokered certificates of deposit are assumed to be individual deposit balances within applicable FDIC insurance limits. Brokered Sweep Deposits Our broker network deposit sweeps are procured through a program arranger who channels account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2026 and 2029.
- Share Price & Shareholder Rights - Risk 5Note 9. Borrowings
20252024At December 31 ($ in millions)Maturity dateInterest RateWeighted average interest rateOutstanding Amount(a)(b)Outstanding Amount(a)(b)Borrowings of consolidated securitization entities:Fixed securitized borrowings2026 - 20284.06% - 5.74%4.97 %$5,490 $4,917 Floating securitized borrowings2027 - 20284.44% - 4.85%4.59 %2,925 2,925 Total borrowings of consolidated securitization entities4.84 %8,415 7,842 Senior unsecured notes:Synchrony Financial senior unsecured notes:Fixed senior unsecured notes2026 - 20312.88% - 5.15%3.90 %2,892 4,637 Fixed-to-floating senior unsecured notes2029 - 20365.02% - 6.00%5.62 %2,534 745 Synchrony Bank senior unsecured notes:Fixed senior unsecured notes20275.63%5.63 %599 1,497 Total senior unsecured notes4.79 %6,025 6,879 Subordinated unsecured notes:Synchrony Financial subordinated unsecured notes:Fixed subordinated unsecured notes20337.25%7.25 %742 741 Total senior and subordinated unsecured notes5.06 %6,767 7,620 Total borrowings$15,182 $15,462 ___________________(a)Includes unamortized debt premiums, discounts and issuance costs.(b)The Company may redeem certain borrowings prior to their original contractual maturity dates in accordance with the optional redemption provision specified in the respective instruments.Debt MaturitiesThe following table summarizes the maturities of the principal amount of our borrowings of consolidated securitization entities and senior and subordinated unsecured notes over the next five years and thereafter: ($ in millions)20262027202820292030ThereafterBorrowings$2,250 $5,350 $2,925 $1,150 $750 $2,800 Senior Unsecured NotesThe following table summarizes the issuances of Synchrony Financial fixed-to-floating rate senior unsecured notes during the year ended December 31, 2025:($ in millions):Issuance DatePrincipal AmountFixed Interest RateInterest Rate Reset DateFloating Rate Spread(a)MaturityMarch 2025$800 5.450%March 6, 2030168 bpsMarch 2031July 2025$500 5.019%July 29, 2028139.5 bpsJuly 2029July 2025$500 6.000%July 29, 2035207 bpsJuly 2036___________________(a)Floating rate applicable at interest rate reset date through maturity, based on compounded Secured Overnight Financing Rate plus floating rate spread noted above.Additional Sources of LiquidityWe have undrawn committed and uncommitted capacity under our credit facilities from private lenders under our securitization programs, subject to customary borrowing conditions, and also have access to the Federal Reserve discount window. At both December 31, 2025 and December 31, 2024, we had:- an aggregate of $2.6 billion of undrawn capacity under our securitization financings, of which $2.1 billion was committed and $450 million was uncommitted, and- an aggregate of $10.0 billion and $11.5 billion, respectively, of available borrowing capacity through the Federal Reserve discount window based on the amount and type of assets pledged.In July 2025, our $500 million unsecured revolving credit facility with private lenders matured.
- Share Price & Shareholder Rights - Risk 6Note 1. Business description
Synchrony Financial (the "Company") provides a range of credit products through financing programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. We primarily offer private label, Dual Card, co-brand and general purpose credit cards, as well as short- and long-term installment loans, and savings products insured by the Federal Deposit Insurance Corporation ("FDIC") through Synchrony Bank (the "Bank"). We conduct our operations through a single business segment. See Note 17. Segment Reporting for additional information.References to the "Company," "we," "us" and "our" are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires.
- Share Price & Shareholder Rights - Risk 7Note 13. Earnings per share
Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities, which are calculated using the treasury stock method.The following table presents the calculation of basic and diluted earnings per common share:Years ended December 31,($ in millions, except per share data)202520242023Net earnings$3,552 $3,499 $2,238 Preferred stock dividends(83)(72)(42)Net earnings available to common stockholders$3,469 $3,427 $2,196 Weighted average common shares outstanding, basic369.9 396.5 421.2 Effect of dilutive securities4.0 4.1 2.3 Weighted average common shares outstanding, dilutive373.9 400.6 423.5 Earnings per basic common share$9.38 $8.64 $5.21 Earnings per diluted common share$9.28 $8.55 $5.19 We have issued stock-based awards under the Synchrony Financial 2024 Long-Term Incentive Plan, along with prior incentive plans. Awards that were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per common share were less than 1 million shares for both the years ended December 31, 2025 and 2024, and 4 million shares for the year ended December 31, 2023.
- Share Price & Shareholder Rights - Risk 8Note 14. Equity and other stock related information
Preferred StockAt December 31, 2025 and 2024, the Company had 1.25 million shares of preferred stock outstanding, which had previously been approved by our Board for issuance. In addition, subject to approval from the Board, we have the ability to issue additional series of preferred stock up to a maximum of 300 million shares at a par value of $0.001 per share authorized for issuance. The following table summarizes the Company's series of preferred stock issued and outstanding at December 31, 2025 and 2024.SeriesIssuance DateRedeemable by Issuer BeginningPer Annum Dividend RateLiquidation Preference per ShareTotal Shares OutstandingDecember 31, 2025December 31, 2024($ in millions, except per share data)Series A(a)November 14, 2019November 15, 20245.625%$1,000750,000$734 $734 Series B(a)February 23, 2024May 15, 20298.25%(b)$1,000500,000$488 $488 Total$1,222 $1,222 _______________________(a)Issued as depositary shares, each representing a 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 at a fixed rate, in each case when, as and if declared by the Board of Directors.(b)Through May 14, 2029; resets May 15, 2029 and each date falling on the fifth anniversary at 5-Year Treasury Rate plus 4.044%.Dividends and Share RepurchasesDuring the years ended December 31, 2025, 2024 and 2023, we declared and paid common stock dividends of $1.15, $1.00 and $0.96 per share of common stock, or $427 million, $398 million and $406 million, respectively. We also declared and paid dividends on our series of preferred stock included in the table above totaling $83 million, $72 million and $42 million, for each of the years ended December 31, 2025, 2024 and 2023, respectively.During the year ended December 31, 2025, the Company repurchased an aggregate of 43.7 million shares of our common stock for $2.9 billion, which does not reflect costs and taxes associated with the purchase of shares. The cost of share repurchases, including direct and incremental costs associated with repurchasing, is recorded as a reduction of shareholder's equity. In April 2025, we announced that the Board of Directors approved a share repurchase program of up to $2.5 billion through June 30, 2026 (the "2025 plan"). In September 2025, the Board of Directors approved an incremental share repurchase authorization of up to $1.0 billion, through June 30, 2026 (collectively with the April 2025 program, the "2025 program"). At December 31, 2025 we had $1.2 billion remaining under the 2025 program. In all instances, our share repurchase programs are subject to market conditions and other factors, including legal and regulatory restrictions and required approvals, if any.Synchrony Financial Incentive ProgramsWe have established the Synchrony Financial 2024 Long-Term Incentive Plan (the "2024 Incentive Plan"), along with prior incentive plans which permit us to issue stock-based, stock-denominated and other awards to officers, employees, consultants and non-employee directors providing services to the Company and our participating affiliates. Available awards under the 2024 Incentive Plan include stock options and stock appreciation rights, restricted stock and restricted stock units ("RSUs"), performance share units ("PSUs") and other awards valued in whole or in part by reference to, or otherwise based on, our common stock (other stock-based awards), and dividend equivalents. Each RSU is convertible into one share of Synchrony Financial common stock. A total of 26.3 million shares of our common stock (including authorized and unissued shares) are available for granting awards under the 2024 Incentive Plan.Our grants generally vest over a three-year term on either an annual pro rata proportional basis, starting with the first anniversary of the award date, or at the end of the term of the award on a cliff basis, provided that the employee has remained continuously employed by the Company through such vesting date. For PSUs, the number of shares of common stock that will ultimately be awarded is contingent upon meeting certain pre-defined financial goals over a designated three-year performance period, and can range from 0% to 150% of the number of PSUs awarded. In addition, the final number of shares of common stock to be awarded is also subject to a Total Shareholder Return ("TSR") modifier of +/-20% based on our TSR performance relative to peers over the designated three-year performance period.Compensation expense related to equity awards is recorded as a component of Employee costs in our Consolidated Statements of Earnings, with a corresponding adjustment to equity, net of tax, included within our Consolidated Statements of Equity. At December 31, 2025, there were 1.1 million stock options issued and outstanding and 6.4 million unvested other stock-based awards, comprising 4.0 million RSUs and 2.4 million PSUs. The total unrecognized compensation cost related to these awards at December 31, 2025 was $152 million, which is expected to be amortized over a weighted average period of 1.8 years.
- Share Price & Shareholder Rights - Risk 9Note 17. Segment reporting
We conduct our operations through a single business segment, which derives interest and fee income earned on our credit products we offer to our customers. Our credit products include private label, dual, co-brand and general purpose credit cards, as well as short- and long-term installment loans. Revenue generating activities are aligned through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). Those platforms are organized by the types of partners we work with to reach our customers. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States.Pursuant to ASC 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance.The chief operating decision maker, our President and Chief Executive Officer, uses consolidated net earnings to assess the performance and profitability of our single business segment. While revenue generating activities are aligned through our five sales platforms, expense activities, including funding costs, credit losses and operating expenses, are managed for the Company as a whole. As a result, detailed profitability information for each sales platform is not used by our chief operating decision maker. The chief operating decision maker uses consolidated net earnings to assess performance by comparing to and monitoring against budget and prior year results. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Company's ability to return capital to shareholders. The following table presents segment information for the periods presented herein:For the years ended December 31($ in millions)202520242023Interest and fees on loans$21,698 $21,596 $19,902 Interest on cash and debt securities903 1,049 808 Total interest income22,601 22,645 20,710 Total interest expense4,135 4,634 3,711 Net interest income18,466 18,011 16,999 Retailer share arrangements(4,005)(3,407)(3,661)Reserve build (release)(439)313 1,345 Net charge-offs5,664 6,420 4,620 Provision for credit losses5,225 6,733 5,965 Other income:Other income520 452 289 Gain on sale of business (Note 3)- 1,069 - Total other income520 1,521 289 Other expense:Employee costs2,093 1,872 1,884 Professional fees936 936 842 Marketing and business development 511 524 527 Information processing 899 803 712 Fraud-related operational losses189 192 288 Other segment items(a)507 512 505 Total other expense 5,135 4,839 4,758 Provision for income taxes1,069 1,054 666 Net earnings$3,552 $3,499 $2,238 _____________(a) Represents the total amount of other expenses included in net earnings, including postage and various other corporate overhead items such as facilities costs and telephone charges.Our segment assets represent our Total assets as presented on the Consolidated Statements of Financial Position.
- Share Price & Shareholder Rights - Risk 10Note 18. Legal proceedings and regulatory matters
In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, "regulatory matters"), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable. Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued. For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management's estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our potential maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates. Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation.
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