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Discover is an experienced direct-to-consumer marketer that can expand the lender it's buying from Tree.com and make broad use of it, executives said.
May 13 -
The credit-card issuer is making a bid to become a player in the growing world of branchless consumer banking.
February 27 -
After enjoying strong growth in its credit card business in 2012, Discover Financial Services is investing some of those returns in a more diverse range of products.
December 20
Discover Financial Services (DFS) beat its earnings expectations as its loans and grew and credit card delinquencies hit an all-time low.
The Riverwooods, Ill., credit card issuer reported Tuesday that it earned $673 million in the first quarter, 4% higher than in the first quarter of 2012. Per-share earnings of $1.33 were 23 cents higher than Bloomberg analysts' estimates.
Discover's net interest income rose 9%, to $1.4 billion. Total loans increased 7%, to $60.4 billion, as credit card loans rose 5%, personal loans jumped 21% and private student loans climbed 6% from the year-prior period. Net interest margin widened by 30 basis points, to 9.39%, as funding costs declined.
Credit card balances more than 30 days past due declined to 11%, to $862 million, for a record-low 1.77% delinquency rate, the company said. The provision for loan losses increased 53%, to $159 million, due in part to a lower reserve release. Net principal chargeoffs fell 13%, to $313 million, due to declining bankruptcies and delinquencies.
Other revenue rose 14%, to $582 million. Noninterest expenses rose 12%, to $753 million, due to higher employee compensation and benefits costs and marketing expenses related to its
Discover's direct banking income rose 3%, to $1 billion.
