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The CFPB has launched a review of the store-branded card deals that offer 0% interest during an introductory period, but then reset to a much higher rate if the balance is not paid in full by a specific date.
October 22 -
The credit card company sees an opportunity to capture market share as the demand for refis slows and other lenders burdened by losses on bubble-era second mortgages scale back.
July 24
Discover Financial Services (DFS) rode credit card loan growth in the fourth quarter to earnings of $602 million, an increase of nearly 12% over the same period in 2012.
The Riverwoods, Ill.-based card issuer reported earnings per diluted share of $1.23. That surpassed the $1.06 earnings per share that Discover recorded in the fourth quarter of 2012, and it also beat the $1.20 consensus estimate of analysts surveyed by Bloomberg.
Discover reported earnings after the markets closed Thursday. In after trading its shares were up 3%, to $54.
Credit card loans grew by 4% from the prior year, and card sales volume grew by 3% during the same period, according to Discover.
"The fourth quarter concluded a strong year for Discover, with record net income for 2013," David Nelms, the company's chief executive officer, said in a news release.
Continuing a recent trend, pretax income from Discover's payment services division fell in the fourth quarter. It totaled $26 million, down from $32 million in the fourth quarter of last year.
The company said that the division's total revenue also declined, primarily because of a decline in revenue from processing transactions on Discover's Pulse network.
The fourth-quarter results from Discover's banking division were more positive. Overall, loans were up 5% over the fourth quarter of 2012, driven in part by a 27% increase in personal loans.
Net interest income in Discover's banking division rose by 10%, to $141 million.
The rate of credit card loans that are delinquent by more than 30 days was 1.72% in the fourth quarter. That was down slightly from the fourth quarter of the previous year, but up a bit from the third quarter of 2013.
Expenses in the company's banking division rose 4% from the prior-year period, to $33 million. Discover attributed the increase in part to a larger headcount and higher expenses for information processing.
