Discover the subscription in Push mode for new customers with card
“There is a connection because, as you broaden your credit criteria, the return on your marketing dollars improves,” Hochschild said. The company could now approve four in ten candidates, for example, instead of three, he said. “It adds to the return on marketing investment.”
Shares of Discover climbed 1.2% to $ 99.54 by 1:15 p.m. in New York – making it the second-best performance of the day in the S&P 500 Financials index of 65 companies – after the company released $ 879 million in reserves, increasing profits for the first three months. of the year. Within its card portfolio, the percentage of loans that are 30 days past due fell 77 basis points to 1.85%.
With the pandemic shutting down businesses across the country and pushing unemployment up, banks last year withdrew from marketing cards aimed at new customers. Now, after the US government injects billions of dollars of stimulus into the economy, many lenders are looking to expand their portfolios again.
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At the start of Covid-19, Discover saw unemployment skyrocket among entry-level workers in the retail, restaurant and hospitality industries. While the company didn’t have many of these workers as card customers, it was concerned that this would translate into job losses for high-income earners as well.
“With the pace of economic recovery, with the reopening of the economy, with the amount of government stimulus, the recovery will come fast enough that you don’t see this second-order effect on white collar positions.” , Hochschild said. “This is what gives us confidence.”
Earlier this year, Discover said it would look to hire nearly 1,000 employees for a new office on the south side of Chicago to promote greater diversity among its workforce. The company received 1,300 applicants for 21 managerial positions in the new office, Hochschild said. The lender is committed to hiring local talent for the Chatham neighborhood office, where 95% of the population is black.
“I’m not a fan of the traditional site selection process which I think tends to perpetuate systemic racism, so we said, ‘You know what? As a company, we are going to go the other way, ”Hochschild said. “I think there is such a big difference between working in a community and writing a check.”
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