Increased card use pushes Discover profits
Discover Financial Services recently revealed that it saw profits surge to $593 million in the three-month period ending May 31, up from the $185 million in the same quarter last year. This was driven largely by an 18 percent increase in the value of purchases made in the quarter, which rose to $71.62 billion. In addition, the number of transactions it processed climbed 25 percent.
In addition, the company also had to set aside far less in the way of loan loss provisions, the report said. Charge offs fell to 5.01 percent of all balances, accounting for $577 million, the report said. That was down from the 8.56 percent observed last year, which cost the company more than $1 billion.
All major U.S. lenders have reported fewer instances of charge offs and delinquencies over the last several quarters, and have seen profits spike as a result.