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DFS

Discover Financial Services Improves Credit Quality with Decreased Charge-Off and Delinquency Rates

Discover Financial Services reported a decrease in net principal charge-off rate from 6.03% in February 2024 to 5.48% in February 2025. This marks a significant improvement in credit quality over the past year. In addition, the delinquency rate (30 or more days) also decreased from 4.01% in February 2024 to 3.87% in February 2025, indicating a positive trend in loan repayment behavior.

The ending loans for February 2025 stood at $99.2 billion, showing a slight decrease from $99.9 billion in February 2024. The average loans for the same periods also saw a decline from $100.3 billion to $100.1 billion, reflecting a reduction in the overall loan portfolio.

It's noteworthy that the net principal charge-off rate experienced a month-over-month decrease of approximately 56 basis points in October 2024 due to disaster relief support extended to customers in regions affected by hurricanes Helene and Milton. This exemplifies the company's efforts in managing credit risks during challenging times.

As a result of these announcements, the company's shares have moved 3.2% on the market, and are now trading at a price of $164.26. If you want to know more, read the company's complete 8-K report here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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