A bank's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.
Discover Bank exceeded the national average on Bankrate's test of earnings, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Discover Bank's most recent annualized quarterly return on equity was 20.42 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank earned net income of $1.08 billion on total equity of $10.60 billion. The bank reported an annualized return on average assets, or ROA, of 2.33 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.