Sector: Financials|Industry: Credit Services|Market Cap: $42.25B|Employees: 21.1K
Discover Financial Services is a digital banking and payment services company, offering credit card loans, personal loans, home loans, and deposit products. The company operates the Discover Network, PULSE network, and Diners Club International, collectively known as the Discover Global Network, which provides payment transaction processing and settlement services. Discover's primary market is the U.S. but also has international operations.
Net income for the quarter reached $1.523 billion, a substantial increase from $889 million in the same period last year. This growth was primarily fueled by higher interest income on credit card loans, which increased from $3.466 billion to $3.959 billion.
The provision for credit losses decreased significantly, from $1.305 billion to $739 million, primarily due to the reclassification of the private student loan portfolio as held-for-sale. This reclassification eliminates the need for an allowance for credit losses on those loans.
Total operating expenses increased from $1.404 billion to $1.738 billion, driven by higher employee compensation and benefits, marketing and business development, and professional fees. This increase partially offset the gains from higher revenue and lower credit loss provisions.