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Benjamin.Davis


Discover Financial Services Reports 41% Increase in Net Income in Q3 2024

2024-10-20

#FinanceConsumerServices #earning_call #Benjamin.Davis #DFS

Discover Financial Services recently held its earnings call, during which key updates and achievements were discussed. Erin Stieber assumed the role of Investor Relations, succeeding Eric Wasserstrom, who decided to explore opportunities outside the company. Michael Shepherd highlighted Discover's robust financial performance in the third quarter, progress on strategic priorities, and the company's high customer satisfaction rankings. Notably, Discover secured the second position in customer satisfaction among U.S. credit card issuers by J.D. Power for the fifth consecutive year.

Financially, Discover reported a net income of $965 million in the third quarter of 2024, marking a significant 41% increase from the previous year. The margin expansion was attributed to a lower card promotional balance mix, leading to a rise in the net interest margin to 11.38%. Despite challenges, credit performance remained stable, with net charge-offs leveling off. Discover's loan portfolios experienced growth, with card receivables increasing by 3% year-over-year and personal loans up by 9%.

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In terms of costs, Discover incurred $43 million in merger and integration planning expenses in the quarter, with expected costs of approximately $125 million for the full year 2024. The total net charge-off rate stood at 4.86%, higher than the previous year. The common equity Tier 1 ratio saw an increase to 12.7%, supported by core earnings and the student loan sale.

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