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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LendingTree Inc | NASDAQ:TREE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 49.41 | 46.98 | 51.50 | 10 | 09:03:46 |
Discover Financial Services (DFS) expects to launch its online mortgage business by mid-year as the credit-card lender continues its push beyond plastic.
Discover Home Loans will originate mortgages and sell the loans in the secondary market, a plan first laid out last year when Discover announced it was buying assets from Tree.com Inc. (TREE), an online lending platform.
"Our aspiration is to be as large as Quicken Loans is today," which does about $30 billion in origination volume annually, said Carlos Minetti, president of consumer banking and operations, at Discover's investor update in New York Thursday.
Mortgages are the lender's latest move to diversify its business, which is still heavily reliant on credit-card loans. In recent years, Discover has also begun offering private student loans and personal loans to grow its balance sheet.
Discover plans to cross-market mortgages to its existing customer base as well as advertise to the broader market, executives said.
It has no plans to retain the servicing functions for the loans it originates but may reconsider that depending on market conditions in the future, said David Nelms, chairman and chief executive.
The move into mortgages also plays into Discover's efforts to become a full-scale online bank that offers a wide array of financial products. To that end, Discover is also testing checking accounts and plans to make them commercially available later this year. The company already offers savings accounts, certificates of deposits and other products. Discover's direct consumer deposits reached $27.3 billion in the fiscal first quarter ended Feb. 29, up 25% from a year earlier, the company said Wednesday.
"You do have a lot of turmoil in branch banking," Roger Hochschild, president and chief operating officer, said Thursday.
As low interest rates make it difficult for branch banks to grow revenue, "you'll see significantly more fees," which should help Discover's efforts, Hochschild said. Discover does not plan to charge maintenance fees for its checking accounts.
Discover's shares were up 4.3% at $32.99 Thursday, a day after it reported a 36% increase in fiscal first-quarter profit to beat analysts' estimates.
-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; andrew.r.johnson@dowjones.com
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