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Discover's net income reaches USD 631 mln in Q1 2012

Friday 23 March 2012 | 11:50 AM CET

US-based direct banking and payment services company Discover Financial Services has seen its Q1 2012 net revenue reach USD 631 million, as compared to USD 465 million in Q1 2011.

According to company’s financial results, net interest income has increased by 11 percent, reaching USD 123 million, mainly as a result of an increase in income from student and personal loans and lower interest expense.

During the period under review, the company’s total loans have reached USD 56.3 billion, up by 9 percent. Credit cards loans have also grown with USD 1.6 billion reaching USD 45.9 billion, with credit cards sales jumping 7 percent.

The delinquency rate for credit card loans over 30 days past due was 2.22 percent, an improvement of 137 basis points over Q1 2011 and 17 basis points over Q4 2011. The credit card net charge-off rate has decreased to 3.07 percent for Q1 2012, down 289 basis points from Q1 2011 and 17 basis points from Q4 2011.

Also, provision for loan losses have decreased by 64 percent from 2011, primarily driven by lower charge-offs as a result of the continued decline in delinquencies. The reserve release for Q1 2012 was USD 226 million, versus a release of USD 271 million in Q1 2011.

Discover has also witnessed its Q1 2012 payment services pretax income grow by 21 percent from 2011 to USD 52 million. Also, transaction volume for the segment was USD 46.7 billion, up by 8 percent since 2011.

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