New York (AP) – Capital One Financial Dollar is buying Discover Financial Services for $ 35 billion, in a deal that will bring two of the country’s two largest lenders and credit cards.
According to a news release issued by companies on Monday, financial shareholders will receive the price of Capital One shares about $ 140. Discover share Friday trading closed at $ 110.49.
According to S&P Global, the Capital One at Virginia was the 12th largest US bank as the third quarter, $ 471.4 billion in total assets and $ 346 billion in deposits. Illinois-based discover was the 33rd largest, with $ 143.4 billion in assets and $ 104 billion in deposits.
Both companies have benefited from increasing the use of credit cards of Americans. In the fourth quarter of 2023, Americans organized $ 1.13 trillion on their credit card, and according to the latest data from the New York Federal Reserve, domestic debt balance increased by 1.2%, increased by 1.2%.
At the same time, both lenders have had to promote their reserves against the possibility of growing borrowers. After struggling with inflation for more than two years, many low and medium-or-I Americans are running through their savings and rapidly running their credit card balance and taking personal loans.
Additional reserves weigh the profits of both banks. Last year, the net income of the capital forest for general shareholders slipped in 35% vs. 2022, as its provision for debt loss increased by 78% to $ 10.4 billion. The full year of the discover was 33.6% vs. its 2022 results were submerged as the credit deficit has increased to more than $ 6.02 billion than doubled as provisions of credit deficit.
Discover customers are taking $ 102 billion in the remaining amount on their credit card up to 13% from a year ago. Meanwhile, the charge-off rates and 30-day delay rates have gone up.
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