Discover Finl Svcs - DFS STOCK NEWS

Discover Financial Services (DFS) received an NYSE notice on November 19, 2024, for failing to file its Q3 2024 10-Q report timely. The company announced it will restate financial statements due to card product misclassification issues dating back to 2007. The restatement follows SEC staff disagreement with DFS's accounting approach and will affect financial statements from 2022-2024. The correction involves reallocating approximately $600 million from Q1 2024 expenses to prior period revenue errors, with total liability reaching approximately $1,047 million. DFS expects to complete the restatement filings before year-end, impacting its pending merger with Capital One.

Telered and Discover Global Network have announced a strategic alliance that will integrate Panama's Sistema Clave system with Discover's global network. This partnership will enable Sistema Clave users to access over 70 million acceptance locations and 1.8 million ATMs worldwide. Conversely, Discover Global Network cardholders will gain access to Telered merchants in Panama.

The alliance will maintain Sistema Clave's traditional advantages while adding contactless technology and digital wallet integration. For Panama merchants, this opens opportunities to serve 345 million cardholders from Discover Network, Diners Club, PULSE, and other strategic alliances. The implementation, known as Proyecto Clave 2.0, will be developed over one year across three stages: processing infrastructure adaptation, new card issuance, and merchant/ATM enablement.

Discover has appointed Kelly Welsh as incoming interim chief legal officer, general counsel and head of corporate and public affairs. Welsh, who brings over 35 years of senior leadership experience, joins the executive management committee as the company approaches its merger with Capital One. He succeeds Hope Mehlman, who is departing at the end of November. Welsh's extensive background includes serving as General Counsel of the U.S. Department of Commerce and executive roles at Northern Trust and Ameritech. He holds degrees from Harvard College, University of Sussex, and Harvard Law School.

Discover Global Network has released its 2024 Payments State of the Union study, revealing key insights into the payments ecosystem. The study highlights that 73% of consumers used instant payments in the last 90 days, with 82% interested in real-time bill payments. Security remains paramount, with 51% of consumers prioritizing personal information security.

Merchants are increasingly focusing on payments, with 61% viewing it as highly strategic for competitive differentiation. Fraud prevention (75%) and providing diverse payment options (75%) are important for merchant success. Fintechs identify consumers (49%) and merchants (39%) as key growth opportunities, with 93% emphasizing the importance of instant payments.

Discover Financial Services reported strong Q3 2024 results with net income of $965 million or $3.69 per diluted share, up 41% and 42% year-over-year respectively. Total revenue net of interest expense increased 10% to $4,453 million. The company's performance benefited from increased net interest margin, modest loan growth, and some credit improvement.

Key highlights include:

• Total loans up 4% YoY to $127.0 billion
• Credit card loans up 3% YoY to $100.5 billion
• Net interest margin expanded to 11.38%, up 43 basis points YoY
• Total net charge-off rate increased to 4.86%, up 134 basis points YoY
• Digital Banking pretax income increased by $401 million YoY
• Payment Services volume up 9% to $100.5 billion

The Board of Directors declared a quarterly cash dividend of $0.70 per share of common stock.

Discover has achieved its goal of creating 1,000 active jobs in Chicago's Chatham area, fulfilling a 3-year commitment to the city's South Side. Over 85% of these employees live within a five-mile radius of the Customer Care Center, which opened in April 2021. Nearly 500 employees have received promotions, showcasing Discover's dedication to internal advancement and local workforce development.

To celebrate this milestone, Discover hosted community events, including a donut giveaway with local shop Dat Donut and a Shine Bright Career and Community Day for local students. The company has made significant economic investments in Chatham, spending over $3 million with diverse local restaurants, $1 million with local vendors, and $8 million with Black-owned contractors. The Shine Bright Community Center has hosted over 900 events with 50,000 attendees and partnered with more than 350 nonprofit organizations.

Discover Financial Services (NYSE: DFS) has announced its plans to release its Third quarter 2024 earnings report after the market closes on Wednesday, October 16, 2024. The company will follow this with a conference call on Thursday, October 17, 2024, at 7:00 a.m. Central Time to discuss the results, outlook, and related matters.

The earnings release will be available on Discover's Investor Relations website. The conference call will be to prepared remarks and will be accessible to the general public via a live audio webcast on the same website. An audio replay of the call will also be made available on the website following the call.

Discover® Global Network's 2024 Payment State of the Union study reveals key insights into the commercial payments landscape in Asia-Pacific (APAC). The study found that 91% of APAC businesses prioritize fraud prevention services, while the appeal for Virtual Card Numbers (VCNs) is growing.

Key findings include:

• 61% of APAC businesses are actively investing or open to investing in commercial payment solutions
• 92% prioritize business travel expense management
• 53% don't currently offer or use VCNs, but 29% plan to invest or are in the discovery phase
• Top challenges include lack of visibility across expense types (35%) and difficulties tracking/managing expenses (34%)

The study highlights the ongoing digital transformation of commercial payments in APAC, with businesses focusing on expense management, security, and fraud prevention features.

The 2024 PULSE Debit Issuer Study, commissioned by Discover Financial Services' PULSE debit network, reveals a rise in the use of debit cards among U.S. consumers. Key findings include an increase in the total number of debit cards, transactions, and annual spend per active card in 2023. Active cardholders averaged 34.6 transactions per month, with 46.89% of transactions being card-not-present (CNP) and 38% of debit cards loaded into mobile wallets. The average debit ticket size was $46.89, with an annual spend per active card at $17,274. Mobile devices accounted for 7% of all debit transactions, and issuers plan to introduce digital instant-issuance capabilities. The study also notes challenges such as a pending reduction in Regulation II's interchange cap, increased competition, and the impact of real-time payments growth.