Discover Financial Loans Rise 4%

By Josh Beckerman 

Discover Financial Services said total loans rose 4% to $71.9 billion in the second quarter, reflecting growth in credit-card lending as well as other categories such as student loans.

Profit rose 3% to $616 million, a figure that included a nonrecurring tax benefit of $44 million.

Earnings per share rose to $1.47, including a tax benefit of 11 cents, from $1.33 a year earlier. Analysts polled by Thomson Reuters had projected $1.42. Such estimates typically exclude nonrecurring items.

Shares rose 2 cents to $57 in after-hours trading.

In January, Chief Executive David Nelms set a target to increase total loans by between 4% and 6% in 2016.

Shares of Discover and other card companies fell when store-card issuer Synchrony Financial increased its credit-loss forecast on June 14. Last Friday, Discover said its delinquency rate in June was 1.6%, flat with a year ago.

On June 29, Discover said the Federal Reserve had no objections to its capital plan, which includes a dividend increase to 30 cents from 28 cents and up to $1.95 billion of stock buybacks through June 2017.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

July 19, 2016 17:20 ET (21:20 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.