(Reuters) – U.S. bank card issuer Uncover Monetary posted a greater than threefold improve in fourth-quarter revenue on Wednesday, helped by a drop in provisions for credit score losses and an increase in curiosity revenue.
The Federal Reserve’s determination to decrease rates of interest and hopes of a mushy touchdown for the economic system helped ease lenders’ considerations about potential credit score defaults in 2025.
Uncover’s provision for credit score losses fell to $1.20 billion within the quarter ended Dec. 31 from about $1.91 billion within the year-ago interval.
Sturdy client spending has helped credit score card-focused lenders rake in the next revenue from curiosity.
Riverwoods, Illinois-based Uncover recorded web curiosity revenue of $3.63 billion for the fourth quarter, up almost 4.7% from the identical quarter final yr.
“Uncover’s fourth quarter outcomes capped off a profitable 2024 as mortgage development, margin growth, and credit score enchancment led to robust monetary efficiency,” mentioned interim CEO Michael Shepherd in a press release.
Capital One Monetary (NYSE:), which is buying Uncover for $35.3 billion in an all-stock deal, additionally recorded a leap in fourth-quarter revenue on Tuesday, helped by greater curiosity revenue.
The merger between Capital One and Uncover would kind the sixth-largest U.S. financial institution by belongings and a U.S. bank card behemoth.
Uncover posted a web revenue of $1.29 billion, or $5.11 per share, within the October-to-December interval, in comparison with $366 million, or $1.45 per share, within the yr in the past interval.
Shares of the corporate, which jumped 54% in 2024, had been up marginally in buying and selling after the bell.