How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's earnings test, Discover Bank scored 28 out of a possible 30, beating out the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Discover Bank's most recent annualized quarterly return on equity was 18.71 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.98 billion on total equity of $10.54 billion. The bank reported 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.