Discover 2011 Annual Report Download - page 8

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PUTTING THE CUSTOMER FIRST
Finally, underlying all of our success in the credit card business is our approach to credit risk management.
We have performed well compared to industry averages over the past several years when it comes to
delinquencies and charge-offs, and as the economy recovers, we are using that expertise to drive
profitable growth in the card business, and to fuel growth in our other consumer lending products.
Other Direct Banking
Our card business gives us a great foundation in direct banking, and our newer lending and
savings products are growing fast. Discover is now a leader in the private student loan, personal loan
and direct-to-consumer deposit markets.
One of the benefits of being a direct bank is that we can focus on the products and services that best
meet the needs of our customers and that we believe will be profitable. For example, as other providers
were getting out of private student loans, we entered the market because our customers value higher
education and because we believe that, managed properly, student loans will be a stable and profitable
asset class over the long term. Similarly, we have grown our personal loans, primarily by helping
customers consolidate and pay down debt.
In 2011, our private student loan and personal loan portfolios grew to a combined $10 billion, which was
18% of our loans at year-end. Meanwhile, we have grown our direct-to-consumer deposits from $3 billion
to $26 billion over the last four years—again, by providing customers with products that they want from
a brand that they trust.
Looking ahead, we are targeting solid growth and strong returns in our private student and personal loan
portfolios, while continuing to pursue other opportunities to expand in direct banking. Our expansion plans
in 2012 include completing the acquisition of substantially all of the assets of the Home Loan Center to
facilitate our entry into the mortgage origination business. With each new product, we are bringing our
heritage of great customer service in the card business to all direct banking customers.