Discover Finl Svcs Stock Price, News & Analysis

Discover Financial Services (NYSE: DFS) has announced its plans to release its Third quarter 2024 earnings report after the market closes on Wednesday, October 16, 2024. The company will follow this with a conference call on Thursday, October 17, 2024, at 7:00 a.m. Central Time to discuss the results, outlook, and related matters.

The earnings release will be available on Discover's Investor Relations website. The conference call will be to prepared remarks and will be accessible to the general public via a live audio webcast on the same website. An audio replay of the call will also be made available on the website following the call.

Discover® Global Network's 2024 Payment State of the Union study reveals key insights into the commercial payments landscape in Asia-Pacific (APAC). The study found that 91% of APAC businesses prioritize fraud prevention services, while the appeal for Virtual Card Numbers (VCNs) is growing.

Key findings include:

• 61% of APAC businesses are actively investing or open to investing in commercial payment solutions
• 92% prioritize business travel expense management
• 53% don't currently offer or use VCNs, but 29% plan to invest or are in the discovery phase
• Top challenges include lack of visibility across expense types (35%) and difficulties tracking/managing expenses (34%)

The study highlights the ongoing digital transformation of commercial payments in APAC, with businesses focusing on expense management, security, and fraud prevention features.

The 2024 PULSE Debit Issuer Study, commissioned by Discover Financial Services' PULSE debit network, reveals a rise in the use of debit cards among U.S. consumers. Key findings include an increase in the total number of debit cards, transactions, and annual spend per active card in 2023. Active cardholders averaged 34.6 transactions per month, with 46.89% of transactions being card-not-present (CNP) and 38% of debit cards loaded into mobile wallets. The average debit ticket size was $46.89, with an annual spend per active card at $17,274. Mobile devices accounted for 7% of all debit transactions, and issuers plan to introduce digital instant-issuance capabilities. The study also notes challenges such as a pending reduction in Regulation II's interchange cap, increased competition, and the impact of real-time payments growth.

Discover Financial Services has been recognized as a 2024 Best Place to Work for People with Disabilities, earning a perfect score of 100 on the Disability Equality Index for the fourth consecutive year. This achievement highlights Discover's commitment to creating an inclusive workplace environment.

Key initiatives include:

• Eight employee resource groups (ERGs), including Strive for Disability Empowerment with over 1,600 members worldwide
• Neurodivergent Connections Hiring Program, welcoming seven new neurodivergent employees in 2023
• Universal Design Advisory Board to enhance accessibility for internal and external customers
• Updated career site with improved accessibility features
• Educational events and panel discussions on disability inclusion and mental health

These efforts demonstrate Discover's ongoing commitment to fostering a diverse, equitable, and inclusive culture for all employees.

A new Discover Personal Loans survey reveals that 80% of Americans experience financial anxiety, with 34% reporting moderate to severe levels. Key findings include:

1. Top financial stressors: inflation (58%), everyday expenses (49%), state of the economy (45%), and current income level (38%).

2. Debt concerns: 30% cite debt as a cause of stress, with 84% having credit card debt and 55% having medical or home loan debt.

3. Financial unpreparedness: Many Americans feel ill-equipped to handle job loss (64%), caregiver expenses (63%), or unexpected expenses over $5,000 (60%).

4. Generational differences: Misconceptions about managing debt and reasons for avoiding personal loans vary across generations.

The survey highlights the need for financial education and awareness of available tools to manage debt and unexpected expenses.

Discover has opened its Shine Bright Community Center in Whitehall, Ohio, marking a significant investment in the local community. The dual-purpose facility includes a Customer Care Center and offers free use for community organizations. With an investment exceeding $16 million in construction, training, and hiring, this facility highlights Discover's commitment to creating opportunities and driving positive change.

The center is the second dual-purpose facility Discover has opened in the last three years, following a similar model in Chicago's South Side. Nearly $6 million or 45% of the construction costs were spent on minority and women-owned businesses. The Whitehall location connects Discover to a talented and diverse pool of candidates, bringing high-quality jobs and contributing to economic growth in the Columbus region.

Discover Financial Services (NYSE: DFS) reported net income of $1.5 billion or $6.06 per diluted share for Q2 2024, a 70% increase from Q2 2023. Total revenue net of interest expense grew 17% to $4,538 million. Total loans increased 8% to $127.6 billion, with credit card loans up 7% to $100.1 billion. The total net charge-off rate rose to 4.83%, up 161 basis points year-over-year. Digital Banking pretax income increased by $694 million, while Payment Services pretax income grew by $207 million. The company declared dividends for its preferred and common stock.

Capital One Financial (NYSE: COF) has announced a $265 billion community benefits plan over five years as part of its proposed acquisition of Discover Financial Services (NYSE: DFS). This plan, developed in partnership with leading community groups, is twice as large as any previous bank acquisition commitment.

Key components include:

• $44 billion in community development financing
• $600 million for Community Development Financial Institutions
• $575 million in philanthropy
• $200 billion in consumer lending to low- and moderate-income (LMI) consumers or LMI communities
• $15 billion in small business lending
• $5 billion in anticipated spending with diverse suppliers

The plan aims to expand economic opportunity for underserved consumers, increase access to financial products and services, and support community development initiatives.

Carlyle and KKR have agreed to acquire a $10.1 billion prime student loan portfolio from Discover Financial Services. The acquisition, led by Carlyle's Credit Strategic Solutions team and KKR's asset-based finance strategy, showcases their expertise in private student loans and asset-backed finance. This transaction allows Discover to simplify its operations and business mix.

The deal is expected to close by the end of 2024, subject to customary conditions. Monogram , a Carlyle portfolio company, will manage the portfolio, while Firstmark Services, a Nelnet subsidiary, will service the loans. This strategic move highlights the evolving lending landscape and the increasing role of private markets in providing flexible solutions to financial institutions.