Discover Sinks After Warning of Rising Losses Later This Year
- White-collar unemployment will ‘push up charge-offs,’ CEO says
- Shares of rivals Capital One, Synchrony also decline
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Discover Financial Services shares plunged after the credit-card company warned that losses are likely to rise in the second half of the year.
The firm has already been tightening underwriting standards for new customers and pulling back on promotional rate offers to better manage risk in the lending portfolio, executives said on a conference call Thursday. Recent data showing rising unemployment among white-collar workers could ultimately lead to greater losses on Discover’s cards, Chief Executive Officer Roger Hochschild said.