How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.
On Bankrate's earnings test, Discover Bank scored 28 out of a possible 30, exceeding the national average of 16.06.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for Discover Bank was 18.71 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $1.98 billion on total equity of $10.54 billion. The bank experienced an annualized return on average assets, or ROA, of 2.09 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.