Improvement in the credit performance of the Discover card portfolio helped Discover Financial Services to generate net income of $349.6 million for the fiscal fourth quarter ended Nov. 30, down 0.8% from $352.5 million during the same period last year, the card company reported this morning. Net revenue rose 1.3%, to $1.6 billion from $1.58 billion.
Revenue in last year’s quarter included $285 million from Visa Inc. and MasterCard Worldwide related to settlement payments stemming from an antitrust dispute (see story).
Discover’s U.S. card-sales volume totaled $23.2 billion for the quarter, up 5.9% from $21.9 billion a year earlier.
Credit card loan receivables decreased 4.8%, to $45.2 billion from $47.5 billion, while total loan receivables were down 4.1%, to $48.8 billion from $50.9 billion.
The net principal credit card charge-off rate decreased 186 basis points, to 6.95% from 8.81%.
The 30 day-plus credit card delinquency rate for the quarter was 4.06%, down 154 basis points from 5.6%. The 90 day-plus credit card delinquency rate was 2.12%, down 82 basis points from 2.94%.
Total third-party issuer sales volume increased 16.4%, to $1.77 billion from $1.52 billion. Diners Club International sales volume totaled $7.33 billion, up 2.2% from $7.17 billion a year ago.
Discover’s proprietary network sales volume totaled $24.1 billion, up 6.2% from $22.7 billion. Discover network transactions processed totaled 412.6 million, up 6.5% from 387.4 million.
Sales volume for Discover’s Pulse PIN-debit network rose 26.7%, to $31.3 billion from 24.7 billion a year ago. Total transactions processed on the Pulse network rose 33.2%, to 901.2 million from 676.8 million.