Why Discover Financial’s Total Interest Income Rose in 1H17
Credit card portfolio
Discover Financial Services (DFS) reported a rise in its total interest income in 1H17 compared to 1H16. In 1H16, the company reported total interest income of ~$4.2 billion. In 1H17, DFS reported total interest income of ~$4.6 billion, reflecting a rise of 11%. This rise was mostly due to the company’s increased interest income generated from credit card accounts.
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In 1H16, Discover Financial reported interest income from credit card loans of ~$3.5 billion and in 1H17, its interest income from credit card interest was ~$3.8 billion.
Discover reported a rise in its interest income garnered from other loans in 1H17 compared to 1H16. In 1H17, the company reported interest income of $746.0 million generated from other loans compared to $657.0 million generated in 1H16.
Discover’s other two components that generated total interest income in 1H17 follow:
- interest income from investment securities: $14.0 million
- other interest income: $64.0 million
Net interest margin
In the next article of this series, let’s look at Discover’s expected total dividends in 2017.