LOS ANGELES (AP) — Discover Financial Services' net income jumped 11 percent in the last three months of 2013, as users of its namesake credit card and other loan services stepped up borrowing and the company set aside less money to cover potential loan losses.
The company said Thursday that total loans grew 5 percent in the quarter versus the same period a year earlier. Credit card loans grew 4 percent. Discover card sales volume rose 3 percent during the October-December period, when customers traditionally ramp up spending for the holidays.
All told, Discover's fourth-quarter net interest income, or money earned from loans after factoring in interest expense, jumped nearly 10 percent to $1.57 billion from $1.43 billion.
In a conference call with Wall Street analysts, Discover Chairman and CEO David Nelms said he anticipates a loan growth will be in the low-single-digit range for the industry this year, noting Discover's loan growth has come from taking share from rivals.
"Our strategy is to continue to grow faster than the industry," Nelms said.
Discover has been working to expand its credit card business, while also pushing further into the payments processing business and direct banking, offering personal, student and home equity loans.
In the company's payments services business, which competes with Visa and MasterCard, revenue dropped 2 percent as transaction processing revenue declined. Dollar volume for the company's payments business slipped 1 percent.
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