Discover Financial Services has reported a net income of $669m, or $1.91 per diluted share, for the second quarter of 2018, a jump of 23% compared to $546m, or $1.40 per diluted share, a year ago.
The firm’s credit card loans increased 10% to $67.8bn for the quarter ended 30 June 2018, while its card sales volume increased 9% year-on-year to $35.1bn.
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Discover Financial also reported 12.88% card yield, up 22 basis points from the previous year. The company attributed the growth to rise in prime rate, partly offset by portfolio mix change and higher interest charge-offs.
The company’s payment services unit generated a pre-tax income of $40m, an increase of $4m from the previous year, owing to international growth.
Payment Services transaction dollar volume grew 14% year-on-year to $57.3bn, while Diners Club volume increased 8% from last year due to continued strength of new franchise relationships.
Discover Financial chairman and CEO David Nelms said: “Our investments in the Discover brand and in growth initiatives across our product set continued to drive outstanding returns this quarter. The direct impact of these initiatives was evident in our continued strong loan and revenue growth.
“Our new capital plan includes a 14% increase in our dividend which, combined with share repurchases, is expected to contribute to a robust level of capital return over the next year.”
