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Synchrony Financial sent a shiver through US credit card stocks on Tuesday by warning that some consumers were struggling to repay loans, just a couple of months after saying that investors should have no cause for concern.

The company, spun out of General Electric in July 2014, said it expected write-off rates to climb 20 to 30 basis points over the next 12 months, and would increase its reserves for bad loans beginning this quarter.

In April, as it presented first-quarter results, the company had guided that net charge-off rates would be consistent with the very low levels of the past couple of years.

Shares in the company, which is the largest supplier of private-label credit cards in the US, fell more than 13 per cent in New York, their biggest daily fall on record, and dragging down peers such as American Express, Capital One and Ally Financial.

The warning also knocked bigger banks, such as JPMorgan Chase and Wells Fargo, which have been vocal in recent months about their plans to build their credit-card units.

Mark Palmer, an analyst at BTIG, noted that the announcement came in the wake of weak sales figures from big department stores, suggesting that the US consumer was not quite as healthy as previously thought.

“Normalisation” in loss rates “should have been expected”, he said, “given the late stage in the credit cycle”.

Credit card units have been a rare bright spot for the big US banks in recent quarters, as trading businesses have struggled for momentum and as losses from loose lending in the oil patch have begun to show up in corporate loan books.

At Chase, for example, net charge-off rates held steady at 2.62 per cent over the year to the end of March, even as the number of active cards jumped by half a million to 33m. Over the long run, loss rates tend to range between 3 and 4 per cent for bank issuers, and about 5 per cent for private-label issuers.

But the announcement from Synchrony suggests that the cycle for cards has begun to turn. The company, which sprung out of GE’s domestic appliances business, issues white-label credit cards for a group of national and regional retailers including Walmart, Lowe’s, Gap and Dick’s Sporting Goods.

More than a quarter of Synchrony’s loan receivables have scores of 660 or below on the commonly used FICO scale, which is typically regarded as subprime.

Brian Doubles, Synchrony’s chief financial officer, said on Tuesday that the company was not seeing a “step change” in loss rates, and noted that it was still “operating at very close to historic lows for the business”.

However, he added that consumers’ ability to “cure themselves” when they start to struggle with late payments has been “challenged”. “It’s been challenged all year and we’ve seen just in the most recent data a little bit of the deterioration there.”

John Hecht, analyst at Jefferies, said that Tuesday’s share-price reactions were amplified by general jitters over Brexit.

“Remember that movie, Airplane, when it was the wrong week to quit sniffing glue? This was the wrong week to change credit guidelines. It’s fuelling the fire of concerns in a very difficult market.”

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