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Synchrony Financial to exit Gap partnership, to redeploy capital to repurchase stock

Shares of Synchrony Financial (SYF) fell 0.7% in premarket trading Tuesday, after the consumer financial services company disclosed that it will not renew its financing partnership with apparel retailer Gap Inc. (GPS) when it expires in April 2022. Gap's stock was still inactive ahead of the open. Synchrony said the partnership with Gap represented about 5% of its loan receivables. "Synchrony was unable to reach contractual and economic terms with Gap that made sense for our company and our shareholders," Synchrony stated in an 8-K filing with the Securities and Exchange Commission. The company expects to recognize a gain from the sale of the portfolio in the second quarter of 2022, and plans to use about $1 billion of capital to buy back stock and to invest in higher growth programs. Synchrony's stock has rallied 24.3% year to date through Monday, while Gap shares have soared 62.3% and the S&P 500 has advanced 9.9%.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

04-13-21 0632ET

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