Discover reports higher profit than predicted by analysts
This week, Discover announced it had made $261 million in the third quarter of 2010, surpassing most expectations. The credit card issuer passed three of its largest rivals in profit as well by as much as 5.1 percent. Discover attributes much of its growth to more consumer credit card spending and a decline in write-offs.
“Discover card spending continued to grow nicely this quarter and our third-party credit and debit network businesses achieved record transaction volumes,” Discover Chief Executive Officer David Nelms said in a statement on Monday.
Although the company continues to see success, Discover says it plans to look for new means of revenue in the near future. In the past, Discover has not has been as profitable as its rivals in the loan sector. Last week, it agreed to buy Citigroup Inc.’s $600 millon student loan corporation. This will make Discover the third largest private student loan provider in the U.S.
Credit card delinquencies decreased between July and August for issuers including Visa, Capital One and American Express as consumers appear to be getting a better handle on their debt.