Discover reports Q4 net interest margin 11.96%, up 98bps y/y

The company states: “Net interest margin was 11.96%, up 98 basis points versus the prior year benefiting from the student loan sale. Card yield was 16.22%, up 59 basis points from the prior year primarily driven by a lower promotional balance mix, partially offset by a lower prime rate and higher interest charge-offs. Total loans ended the quarter at $121.1 billion, down 6% year-over-year, and down 5% sequentially. Average total loans were up 6% in 2024. Credit card loans ended the quarter at $102.8 billion, up 1% year-over-year, and Personal loans increased $462 million, or 5%. The total net charge-off rate was 4.64%, up 53 basis points from the prior year period and down 22 basis points from the prior quarter reflecting continued seasoning of recent vintages. The credit card net charge-off rate was 5.03%, up 35 basis points from the prior year period and down 25 basis points from the prior quarter. The 30+ day delinquency rate for credit card loans was 3.84%, down 3 basis points year-over-year and flat from the prior quarter. Provision for credit losses of $1.2 billion decreased $707 million from the prior year quarter driven by an $807 million favorable reserve change, partially offset by a $93 million increase in net charge-offs.”