Fitch Ratings affirmed Synovus Financial Corporation's Long- and Short-Term Issuer Default Ratings (IDRs) at 'BBB' and 'F3' respectively on March 12, 2025. The Rating Outlook, however, remains Negative, indicating potential for a downgrade if certain conditions persist or worsen.
The affirmation reflects Synovus's stable business profile and modest improvements in asset quality, with the impaired loans ratio declining by 19 basis points to 1.0% and the net charge-off ratio decreasing by 4 basis points to 31 basis points at year-end 2024. The Common Equity Tier 1 (CET1) ratio also increased to 10.8% at year-end 2024 from 10.2% at year-end 2023.
Despite these improvements, Fitch noted that profitability declined, with operating profit to risk-weighted assets falling to 1.3% at year-end 2024 from 1.4% at year-end 2023, primarily due to a $257 million securities repositioning loss. The Negative Outlook on profitability remains due to potential challenges from weaker economic growth, flat loan growth, and higher provisions for credit losses.
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