Discover?s October Charge Offs Fall

The Discover Card Master Trust reported its October charge off rate at 3.98 percent annualized, a decline of 6 basis points from September. The delinquency rate on the trust at the end of October was 3.72 percent, up 13 basis points from the previous month. 

At October’s start, the trust had a gross charge off rate of 4.98 percent with a balance of $117.7 million. Recovery of $23.5 million, or a rate of 0.99 percent, led to the 3.98 percent charge off rate at month’s end.

Lehman Brother’s analyst Bruce Harting noted that Discover CEO David Nelms indicated during a recent presentation that the firm’s managed charge off rate would fall between 4.25 percent and 4.75 percent in 2008.

The trust had a total of 235,057 delinquent accounts with an ending balance of more than $1.4 billion. There were 29,108 delinquent accounts 150 to 179 days past due with a total ending balance of more than $197.7 million.

Receivables at month end totaled $29.1 billion. The portfolio’s yield for October was 17.20 percent, compared with 16.86 percent in September, according to Harting.