Discover Financial Services more than doubled its third-quarter net income to $649 million, as its customers increased their spending and its credit card loan portfolio grew for the first time in over two years.
The Riverwoods, Ill. credit card company said on Thursday that it earned $1.18 per share in its fiscal third quarter ended August 31. That compared to a profit of $261 million, or 47 cents per share, in the year-ago quarter.
Discover's quarterly credit card charge-off rate fell 388 basis points from a year earlier to 3.85%. Its card loan portfolio grew 2% from a year earlier, in what was the first such increase for Discover since the second quarter of 2009.
In a press release, Chief Executive David Nelms hailed the "reemergence of year-over-year growth in Discover card receivables" after the recession. Banks and credit card companies have seen their losses on bad loans fall since the worst of the financial crisis, but consumer demand for new loans has remained weak.
Discover has been trying to expand beyond its traditional credit card lending and network business into online banking, student lending and mortgage origination. But the company is still facing some hurdles. Last month its deal to buy $1.1 billion of banking deposits from Allstate Corp. fell through.