Synchrony Says Walmart to Drop Lawsuit Against Credit-Card Issuer
January 23 2019 - 8:53AM
Dow Jones News
By AnnaMaria Andriotis
Synchrony Financial said Wednesday Walmart Inc. has agreed to
dismiss a lawsuit against the bank that alleged it breached the
terms of their long-running credit-card deal.
In the lawsuit, filed late last year in the U.S. District Court
of the Western District of Arkansas, Walmart said that some of
Synchrony's underwriting standards financially harmed the retailer.
Walmart was seeking damages estimated to be no less than $800
million.
A representative for Walmart couldn't immediately be reached for
comment.
Also on Wednesday, Synchrony reported higher profit, which
exceeded analysts' expectations.
Synchrony had been Walmart's exclusive credit-card issuer until
the merchant decided last year to replace it with Capital One
Financial Corp.
Walmart filed the lawsuit last year as Synchrony was negotiating
the possible sale of its existing Walmart credit-card balances to
Capital One.
Capital One Chief Executive Richard Fairbank said Tuesday the
bank had agreed to buy the roughly $9 billion in card balances. On
a call with analysts to discuss the bank's fourth-quarter earnings,
he said the balances have "high credit losses," adding that Capital
One's share of credit losses on the acquired portfolio is fixed at
a low percentage throughout the partnership with Walmart.
Loan losses as of last spring were around 9% of outstanding
balances on Walmart credit cards, The Wall Street Journal
previously reported.
Synchrony Wednesday said it renewed and extended retail card
partnerships with Walmart unit Sam's Club and Amazon.com Inc.
Investors had been concerned about the future of the Sam's Club
partnership following Synchrony's loss of the Walmart deal.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
January 23, 2019 08:38 ET (13:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Walmart (NYSE:WMT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Walmart (NYSE:WMT)
Historical Stock Chart
From Sep 2023 to Sep 2024