Discover Financial Services has reported a net income allocated to common stockholders of $681m for the fourth quarter of 2018, a surge of 89% compared to $359m in the year ago period.

For the quarter ended 31 December 2018, the company’s revenue net of interest expense totalled $2.8bn as against $2.6bn in the fourth quarter of 2017.

Net interest income increased $181m, or 9%, from the prior year. Net interest margin was 10.35%, up 7 basis points versus the prior year.

Card yield was 13.20%, an increase of 41 basis points from the prior year. Interest expense as a percent of total loans increased 61 basis points from the prior year, primarily as a result of higher market rates.

The card company’s credit card loans grew 8% to $72.9bn during the quarter.

Discover Financial’s payment services division reported a pre-tax income of $23m, a decrease of $6m compared to last year.

Payment Services transaction dollar volume grew 12% year-on-year to $60.5bn, while PULSE transaction dollar rose 11% year-over-year. Network Partners volume increased by 43% from the prior year driven by AribaPay.

Commenting on the results, Discover CEO and president Roger Hochschild said, “Our disciplined focus on delivering profitable growth continued to drive solid operating performance and strong returns in the fourth quarter.

“For the full year, our results were characterised by robust returns even as credit normalization continued, and our ongoing investments in technology and global merchant acceptance will enhance customer experience, scale, and overall performance.

“We believe these initiatives will set us up for continued growth and industry-leading returns going forward.”