Capital One, the online consumer bank and credit card issuer backed by investor Warren Buffett, is considering a possible acquisition of credit card lender Discover Financial Services, people said. .
Terms have not been disclosed, but sources said the deal could be announced as early as Tuesday.
Discover Financial’s market cap is $27.6 billion, compared to Capital One’s $52.2 billion, according to LSEG data.
The deal was first reported by Bloomberg News. Discover and Capital One did not respond to requests for comment.
Bloomberg reports that Capital One is working with advisers to “consider a transaction” with Discover.
The partnership comes weeks after TD Bank Group veteran Michael Rose became Discover Financial’s new CEO following the departure of Roger Hochschild in August.
Discover is considering selling its student loan business in the second half of 2023, and announced in February that it would stop accepting new student loan applications.
In July, the company disclosed a regulatory investigation into some credit card accounts that were misclassified since mid-2007.
Discover announced in October that it had agreed to consumer compliance and related corporate governance improvements as part of a consent order with the Federal Deposit Insurance Corporation.
Discover and Capital One each posted a 62% drop in fourth-quarter profits in January as rising interest rates increased the risk of consumers defaulting on their credit card debts and mortgages and banks increased provisions for losses on bad loans. , reported a 43% decrease.
