DFS

Discover Financial Services Reports 41% Increase in Net Income

Discover Financial Services has reported a significant increase in net income, with a reported $965 million for the third quarter of 2024 compared to $683 million for the same period in 2023. This represents a 41% year-over-year increase. Diluted earnings per share also saw a substantial rise, reaching $3.69 compared to $2.59 in the third quarter of 2023, marking a 42% increase.

In terms of total loans, the end-of-period figure for the third quarter of 2024 stood at $127.0 billion, a 4% increase from the third quarter of 2023. Total revenue net of interest expense also saw a notable increase, reaching $4.453 billion, a 10% rise from the same period in 2023.

The total net charge-off rate for the third quarter of 2024 was 4.86%, marking a substantial increase of 134 basis points from the third quarter of 2023. This reflects continued seasoning of recent vintages and the student loan accounting classification change. The credit card net charge-off rate was 5.28%, up 125 basis points from the third quarter of 2023 and down 27 basis points from the prior quarter. Additionally, the 30+ day delinquency rate for credit card loans was 3.84%, representing an increase of 43 basis points year-over-year and 15 basis points from the prior quarter.

Discover Financial Services' digital banking segment reported a pretax income of $1.2 billion for the quarter, marking a $401 million increase from the prior year period. This significant growth was attributed to increased revenue net of interest expense and a lower provision for credit losses, partially offset by increased operating expenses.

Moreover, the company's payment services segment saw a pretax income of $84 million, remaining largely flat year-over-year. Payment services volume reached $100.5 billion, a 9% increase from the prior year period. However, Discover Network volume was down 4%, while Pulse dollar volume saw a 14% increase, and Diners Club volume was up 7% year-over-year.

In response to these positive financial results, the company's board of directors declared a quarterly cash dividend of $0.70 per share of common stock, payable on December 5, 2024, to holders of record at the close of business on November 21, 2024.

Discover Financial Services will be hosting a conference call to discuss its third-quarter results on Thursday, October 17, 2024, at 7:00 a.m. Central Time. As a result of these announcements, the company's shares have moved 1.5% on the market, and are now trading at a price of $149.8. If you want to know more, read the company's complete 8-K report here.

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