Discover Financial Services

Strong Financial Performance: Discover Financial Services reported net income of $1.3 billion for Q4 2024, a significant increase compared to $366 million in Q4 2023. The full-year net income was $4.5 billion, with earnings per share reaching $17.72, reflecting growth driven by higher net interest margins, increased average loans, and a successful student loan portfolio sale.

Net Interest Margin Growth: The company's net interest margin for Q4 2024 reached 11.96%, an increase of 98 basis points year-over-year and 58 basis points sequentially. This improvement resulted from a favorable product mix and a decrease in card promotional balances, emphasizing effective interest rate management.

Declining Charge-Offs and Improved Credit Performance: Total net charge-offs decreased to 4.64% in Q4 2024, down 22 basis points from the previous quarter and below the prior year's rate of 5.17%. This trend is expected to continue into 2025, as the company observes stable consumer conditions supported by wage growth and a resilient labor market.