RIVERWOODS, Ill. – Discover Financial Services posted a record second-quarter profit yesterday, based on rapid growth in debit income and lower loan losses.
Net income for the three months ended May 31 more than doubled to $600 million, from the $258 million for the same period a year earlier.
The record earnings were fueled by an 18% rise in volume for the company's transaction processing networks. The number of transactions on the Pulse network increased 25%, reflecting a huge growth in debit transactions, which topped $1 billion for the first time during the quarter.
Second quarter performance also was boosted by a decline in charge-offs to 4.82%, from 8.81% for the same period last year, as overdue loans set a 25-year low.
Discover said sales volume on its cards rose 9% during the quarter to $24.84 billion. That gain reflected new customers, more card use by existing customers and 8% growth in the number of merchants that accept its cards.
