Discover Financial quarterly profit jumps on robust interest income, lower provisions
2024.10.16 17:21
(Reuters) – Discover Financial’s third-quarter profit jumped 43% as the U.S. credit card issuer’s net interest income climbed and its provisions for potential sour loans fell, the company said on Wednesday.
The company recorded net interest income of $3.66 billion in the quarter, 10% higher than the year-ago quarter.
Credit card firms’ interest incomes have benefited as the Federal Reserve raised its benchmark rates multiple times over the last four years to tame sticky inflation.
The U.S. central bank cut its key interest rate last month, which is expected to weigh on interest income of banks and credit card companies in the coming quarters.
Discover’s provision for credit losses fell to $1.47 billion in the three months ended Sept. 30 from about $1.70 billion.
Meanwhile, the company’s proposed $35 billion acquisition by Capital One announced in February is facing lawsuits from consumers and tough scrutiny by some lawmakers.
Riverwoods, Illinois-based Discover’s net income rose to $928 million, or $3.69 per share, from $647 million, or $2.59 per share, a year earlier.
