Friday, February 27th1.2°C
25329
23931

Growth in loans, decline in loan-loss reserves boost Discover Financial's 4Q profit

LOS ANGELES, Calif. - Discover Financial Services' net income jumped 11 per cent in the last three months of 2013, as users of its namesake credit card and other loan services stepped up borrowing and the company set aside less money to cover potential loan losses.

The company said Thursday that total loans grew 5 per cent in the quarter versus the same period a year earlier. Credit card loans grew 4 per cent. Discover card sales volume rose 3 per cent during the October-December period, when customers traditionally ramp up spending for the holidays.

All told, Discover's fourth-quarter net interest income, or money earned from loans after factoring in interest expense, jumped nearly 10 per cent to $1.57 billion from $1.43 billion.

In a conference call with Wall Street analysts, Discover Chairman and CEO David Nelms said he anticipates a loan growth will be in the low-single-digit range for the industry this year, noting Discover's loan growth has come from taking share from rivals.

"Our strategy is to continue to grow faster than the industry," Nelms said.

Discover has been working to expand its credit card business, while also pushing further into the payments processing business and direct banking, offering personal, student and home equity loans.

In the company's payments services business, which competes with Visa and MasterCard, revenue dropped 2 per cent as transaction processing revenue declined. Dollar volume for the company's payments business slipped 1 per cent.

The latest quarter included a provision for potential loan losses of $354 million, down from $370 million a year earlier.

All told, Discover said that its profit after paying preferred dividends was $588 million, or $1.23 per share, in the three months ended Nov. 30. That compares with $530 million, or $1.06 per share, a year earlier.

Revenue net of interest expense grew about 6 per cent to $2.13 billion, up from $2.02 billion.

Analysts polled by FactSet expected earnings of $1.17 per share on $2.1 billion in revenue.

Discover's board declared a quarterly cash dividend of 20 cents to be paid Feb. 20 to shareholders of record as of Feb. 6. The company also will pay a quarterly cash dividend of $16.25 to certain preferred shareholders. That dividend will be paid on March 3 to shareholders of record on Feb. 14.

Shares of Riverwoods, Ill.-based Discover ended regular trading down $1.26, or 2.4 per cent, at $52.40. The stock added $1.10, or 2 per cent, to $53.50 in extended trading.

The Canadian Press


Read more Business News

24153


Recent Trending




Today's Market
S&P TSX15268.13+26.97
S&P CDNX701.28+0.35
DJIA18184.12-30.30
Nasdaq4977.392-10.498
S&P 5002108.11-2.63
CDN Dollar0.8012+0.002
Gold1203.00+6.10
Oil51.40+1.01
Lumber296.60+1.10
Natural Gas2.895-0.007

 
Okanagan Companies
Pacific Safety0.12+0.005
Knighthawk0.010.00
QHR Technologies Inc1.57-0.01
Cantex0.035-0.005
Anavex Life Sciences0.19+0.001
Metalex Ventures0.035-0.005
Russel Metals25.65+0.35
Copper Mountain Mining1.28+0.02
Colorado Resources0.15+0.015
ReliaBrand Inc0.0087+0.0017
Sunrise Resources Ltd0.05+0.015
Mission Ready Services0.215+0.005

 



24909

FEATURED Property
2187797#36-6100 Old Vernon Road
3 bedrooms 3 baths
$378,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


It's OK to say 'I'm sorry'

Photo: ContributedStand-up comedians and sitcoms have been making fun of Canadians for being polite as long as I can remember. Being known for our niceness is certainly not a bad thing and I wish more...


Are you asking the right questions?

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...

_








Member of BC Press Council


25207