Payment Methods

Discover Beats Street EPS on Card and Loan Growth

Wall Street

Discover Financial Services beat estimates on the top and bottom lines for the second quarter as the firm saw total loans grow to just under $72 billion, up four percent.

That loan growth showed attendant growth in credit card lending, student loans and other credit products.  The net income per share was $1.47, five cents better than the Street had forecast for the second quarter.  The revenues of $2.2 billion were in line with expectations.

Drilling down a bit, the firm said that the credit card loans were up four percent to $57.2 billion, while student loans and personal loans were both up double-digit percentage points.  Volume of Discover cards sales was up two percent.  As has been reported, Discover’s delinquency rate at 1.6 percent remained unchanged from a year ago. All in, the total loan growth stood in the range of management’s stated target of growth of between four to six percent.

The debit card network, Pulse, showed a nine percent decrease in volume, with expectations to eventually stabilize.  Rewards, said CEO David W. Nelms, outpaced sales growth, with a new “post-recession record for new card accounts” occurring in the quarter.” Elsewhere on the call Nelms noted that consumers have deleveraged and “are starting to modestly increase their borrowings.”

In response to an analyst's question about personal loans showing double-digit year over year growth, ratcheting up to a high level in four quarters, Nelms maintained that boost came in part due to “the pullback of some formerly P2P companies.”

 

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

Click to comment

TRENDING RIGHT NOW