DBRS watches Discover positively

DBRS said it placed the credit ratings of Discover Financial Services and its banking subsidiary, Discover Bank, including the company’s BBB (high), long-term issuer rating under review with positive implications. The credit ratings actions follow the announcement that Capital One Financial Corp., rated A (low), agreed to acquire Discover.

“The under review with positive implications reflects Morningstar DBRS’s view that Discover will benefit from merging with Capital One, a more highly rated financial institution. The integration with Capital One is expected to result in efficiencies and economies of scale along with the benefits of a more diversified business model and a larger financial institution. The company’s funding profile is expected to benefit from Capital One’s solid deposit franchise,” the agency said in a press release.

DBRS said it aims to conclude the review upon the expected close of the transaction in late 2024 or early 2025.

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