LOS ANGELES (AP) — In a story April 22 about Discover Financial earnings, The Associated Press reported erroneously that the company plans to launch a direct checking service next year. The service is planned for this year. The error was left in the story due to a technical glitch.
A corrected version of the story is below:
Discover Financial's profit declines 6 pct. in 1Q
Rise in loan-loss reserve offsets growth in loans as Discover Financial's 1Q profit slides
By ALEX VEIGA
AP Business Writer
LOS ANGELES (AP) — Discover Financial Services' net income fell 6 percent in the first three months of the year as the company set aside more money to cover potential loan losses, offsetting loan growth.
The credit card issuer and lender said Tuesday that total loans grew 6 percent in the first quarter from a year earlier. Personal loans jumped 27 percent, while private student loans rose 5 percent. Credit card loans increased 5 percent, while sales volume for the company's namesake card rose 3 percent.
During a conference call with Wall Street analysts, Discover Chairman and CEO David Nelms said he feels good about the pace of card loan growth in the first quarter, but would like to see more of a pickup in card sales growth. He said card sales growth might rise if retail sales increase.
Wall Street is watching results for Discover and other card issuers to gauge how the U.S. economy fares following an unusually bitter winter that sent factories, hiring and consumer spending into hibernation.
Recent data show consumers started spending more toward the end of the first quarter. U.S. retail sales rose last month by 1.1 percent.
Discover has also been working to expand its credit card business, adding features like free credit scores on cardholder statements. It also plans to offer student loan consolidation and direct checking later this year.
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