RIVERWOODS, Ill. – Discover Financial Services yesterday reported a $177 million operating loss for its fiscal first quarter as its set aside more reserves to cover bad loans while credit defaults mounted.
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Still, the parent of the Pulse EFT network reported first-quarter net income of $120 million, because of $297 million payments from an antitrust settlement with Visa and MasterCard.
Discover's charge-off ratio--the percentage of debt it does not expect to be repaid--climbed to 6.48% from 5.48% in the fourth quarter. Its 30-day delinquency rate rose to 5.25% from 4.56%. The company set aside $707 million in the first quarter to cover credit losses as the recession deepens and unemployment soars.
