discover financial servicesthird quarter of income result evidence provided it is acquisition by capital one Things are going well.
There is a growing sense of caution regarding the consumer situation, and many households are looking for ways to consolidate their debts.
Interim CEO michael shepherd “Capital One continues to lead merger-related activities and the filing is currently under regulatory review,” the company said in an earnings call. Integration plans are progressing well. ”
According to one study, payments fell 4% to $55.2 billion overall, reflecting weaker Discover card sales. Financial results briefing. PULSE transaction volume increased 14% to $82.6 billion. increase in Debit transaction volume.
CFO john green During the call, I mentioned that my card accounts receivable had increased by 3%. YoY comparison This is because the payment rate will be lower. This metric was offset by lower sales volumes. Payment rates were 1% lower than last year, but still 0.7% above pre-pandemic levels.
Discover's decline in card sales is due to 'cautious consumer behavior' own Green said in a phone call that it was a credit tightening measure.
“We expect these conditions to persist for the rest of the year,” Green said, later reiterating that consumers were “stable but cautious.”
He added: “Households are grappling with inflation and its impact on daily living costs. Spending per cardholder is returning to more normal levels. Moderate and stable spending means households are It shows that you are adjusting your spending patterns and managing your budget, which is beneficial from a credit perspective.”
Demand for debt consolidation
Green also noted on the conference call that personal loans are up 9% year-over-year as the company continues to see “strong demand from consumers seeking debt consolidation.”
with reference to Credit history shows total company-wide charge-offs at approximately 4.9%, an increase of 1.3% from a year ago. Cards net charge-offs decreased 0.3% sequentially and delinquency rates were in line with seasonal trends.
The credit card net charge-off rate was 5.28%. The company noted that the 30+ day delinquency rate for credit card loans was 3.84%, an increase of 0.43% year-on-year. Personal loan net charge-off rate was 4.01%, an increase of 1.4% basis points year over year.
Green added that the company is lowering its net charge-off rate forecast to 4.9% to 5% from the previous 4.9% to 5.2%. Loan growth was expected to decline low single digits Percentage points are now expected to fall to low-to-mid single-digit percentages.
There was no question-and-answer session with analysts during the conference call.
Discover shares rose 2% in intraday trading Thursday.
