American card issuer Discover Financial Services has posted a net income of $563m, or $1.40 per diluted share, for the fourth quarter of 2016, a 12.6% increase compared to $500m, or $1.14 per diluted share, for the same period in 2015.
The firm's credit card loans grew 6% to $61.5bn for the quarter ended 31 December 2016, while the card sales volume increased 3% from the last year.
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The payment services unit of Discover Financial reported a pre-tax income of $15m, down $6m from the prior year driven by expense increases.
Payment Services transaction dollar volume was $46.1bn, flat to the prior year, while PULSE transaction dollar volume dipped 1% year-over-year due to the loss of volume from a large debit issuer. Diners Club International volume increased 8% from the prior year driven by continued growth in Asia.
Discover Financial Services chairman and CEO David Nelms said: "We delivered robust revenue growth in the fourth quarter with a solid operating efficiency ratio. While the seasoning of loans from the past several years of growth continued to drive provisions, overall credit performance remained healthy.
“We are proud of all we accomplished in 2016, including record originations in personal and student loans as well as strong new card account growth, all of which helped us to achieve nearly 7% loan growth. In 2017, we will continue to invest for long-term growth and remain focused on capital return."
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