發現金融 (DFS) 2023 Q2 法說會逐字稿

Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2023 Discover Financial Services Earnings Conference Call. (Operator Instructions) I will now turn the call over to Mr. Eric Wasserstrom, Head of Investor Relations. Please go ahead.

早上好。我叫托德，今天我將擔任你們的會議操作員。在此，我歡迎大家參加 2023 年第二季度 Discover Financial Services 收益電話會議。 （操作員指示）我現在將電話轉給投資者關係主管 Eric Wasserstrom 先生。請繼續。

Thanks, Todd, and good morning, everyone. Welcome to this morning's call. I'll begin on Slide 2 of our earnings present in, which you can find in the financial section of our Investor Relations website, investorrelations.discover.com. Our discussion today contains certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in our second quarter earnings release and presentation.

謝謝托德，大家早上好。歡迎大家參加今天早上的電話會議。我將從幻燈片 2 開始介紹我們的收益，您可以在我們的投資者關係網站 Investorrelations.discover.com 的財務部分找到該收益。我們今天的討論包含某些前瞻性陳述，這些陳述存在風險和不確定性，可能導致實際結果出現重大差異。請參閱我們關於第二季度收益發布和演示中出現的前瞻性陳述的通知。

On our call today, we'll include remarks from our CEO, Roger Hochschild; and John Greene, our Chief Financial Officer. After we conclude our formal comments, there will have time for a Q&A session. During the Q&A session, we ask that you pose one question followed by one follow-up question. After your follow-up question, please return to the queue. Now it's my pleasure to turn the call over to Roger.

在今天的電話會議上，我們將聽取首席執行官 Roger Hochschild 的講話；和我們的首席財務官約翰·格林。在我們結束正式評論後，將有時間進行問答環節。在問答環節中，我們要求您提出一個問題，然後提出一個後續問題。提出後續問題後，請返回隊列。現在我很高興將電話轉給羅傑。

Thank you, Eric, and thanks to our listeners for joining today's call. I'll begin by reviewing some of our highlights for the quarter and then discuss the regulatory matter that we've disclosed in our press release. John will then take you through the details of our second quarter results and our updated perspectives on 2023.

謝謝你，埃里克，也感謝我們的聽眾參加今天的電話會議。我將首先回顧本季度的一些亮點，然後討論我們在新聞稿中披露的監管問題。然後，約翰將向您詳細介紹我們第二季度的業績以及我們對 2023 年的最新看法。

Last night, we reported second quarter net income of $901 million or $3.54 per share. The quarter was characterized by strong asset and deposit growth, while credit is performing right in line with our expectations. Importantly, we advanced several operational priorities this quarter. One key milestone occurred in May, when we relaunched our Cashback Debit product. We're excited by the positive early results we're seeing so far. In the first few weeks, we opened over 30,000 new accounts, and plan to begin national marketing in support of this product in the fall. The relaunch advances our goal of becoming the leading direct bank and over time, we expect Cashback Debit will be a significant entry point into the Discover franchise.

昨晚，我們報告第二季度淨利潤為 9.01 億美元，即每股 3.54 美元。本季度的特點是資產和存款強勁增長，而信貸表現符合我們的預期。重要的是，我們本季度推進了多項運營重點。一個重要的里程碑發生在五月份，當時我們重新推出了現金返還借記產品。我們對迄今為止所看到的積極的早期結果感到興奮。在最初幾週內，我們開設了 30,000 多個新帳戶，併計劃在秋季開始全國營銷以支持該產品。此次重新啟動推進了我們成為領先的直接銀行的目標，隨著時間的推移，我們預計現金返還借記將成為探索特許經營權的重要切入點。

We also continue to expand the Discover Global Network. This quarter, we announced 5 new partnerships in the Asia Pacific region and added a new partnership with GUAVAPAY in the U.K. These strategic partnerships underscore our commitment to building out our international acceptance. And lastly, we continue to invest in our human capital. We're honored to have been recognized as the 2023 Best Places to Work for people with disabilities. This builds upon our recent recognitions as one of Fortune's 100 Best Companies to Work For, Best Workplaces for Parents and Best Workplaces for Women.

我們還繼續擴大探索全球網絡。本季度，我們宣佈在亞太地區建立 5 個新的合作夥伴關係，並在英國增加了與 GUAVAPAY 的新合作夥伴關係。這些戰略合作夥伴關係強調了我們致力於提高我們的國際認可度的承諾。最後，我們繼續投資於人力資本。我們很榮幸被評為 2023 年殘疾人最佳工作場所。這是基於我們最近被《財富》雜誌評選為 100 家最適宜工作的公司、最適合父母的工作場所和最適合女性的工作場所之一。

As you may have read in our press release last night, beginning around mid-2007, we incorrectly classified certain card accounts into our highest merchant and merchant acquirer pricing tier. We are taking actions to correct this card product misclassification going forward and are preparing a program to compensate affected merchants and acquirers. While the financial impacts of this misclassification are not material, it underscored deficiencies in our corporate governance and risk management. We're in discussions with our regulators regarding these matters.

正如您昨晚在我們的新聞稿中所讀到的那樣，從 2007 年中期左右開始，我們錯誤地將某些卡賬戶歸入我們的最高商家和商家收單機構定價等級。我們正在採取行動糾正該卡產品的錯誤分類，並正在準備一項計劃來補償受影響的商戶和收單機構。雖然這種錯誤分類的財務影響並不重大，但它凸顯了我們公司治理和風險管理的缺陷。我們正在與監管機構就這些問題進行討論。

We have received a proposed consent order from the FDIC in connection with consumer compliance which does not cover the misclassification topic. We believe additional supervisory actions could occur. I want to emphasize that we take our business practices and compliance very seriously. We've made significant progress and investment in this area and look forward to working with our board and our regulators to achieve further advancements. Now I'll hand it over to John to review our results and updated outlook in more detail.

我們已收到 FDIC 提出的與消費者合規相關的同意令，其中不涉及錯誤分類主題。我們認為可能會採取額外的監管行動。我想強調的是，我們非常重視我們的業務實踐和合規性。我們在這一領域取得了重大進展和投資，並期待與我們的董事會和監管機構合作，取得進一步的進步。現在我將把它交給約翰來更詳細地審查我們的結果和更新的前景。

Thank you, Roger, and good morning, everyone. I'm going to open by addressing the financial implications of the card misclassification. We have established a liability on our balance sheet of $365 million to accrue for estimated compensation owed to merchants and acquirers. In establishing the liability, we adjusted retained earnings by $255 million net of tax. $11 million was taken this quarter and is reflected in discount and interchange revenue. The first half 2023 impact was $22 million. With that, I'll transition to our financial summary results on Slide 4.

謝謝你，羅傑，大家早上好。我將首先討論卡錯誤分類所帶來的財務影響。我們已在資產負債表上確定了 3.65 億美元的負債，用於支付對商家和收單機構的估計賠償。在確定負債時，我們調整了 2.55 億美元的稅後留存收益。本季度獲得 1100 萬美元，並反映在折扣和交換收入中。 2023 年上半年影響為 2200 萬美元。接下來，我將過渡到幻燈片 4 上的財務摘要結果。

From this, you can see that the financial performance of the business remains solid. In the quarter, we reported net income of $901 million, which was 18% lower year-over-year. Our results reflect strong revenue growth, partially offset by a provision increase driven by receivable growth and higher expenses. The trends for the quarter were robust loan growth, a low efficiency ratio even as we invested in compliance management and technology and strong capital and liquidity positions. Further details are reflected on Slide 5.

由此可見，該公司的財務業績依然穩健。本季度，我們報告淨利潤為 9.01 億美元，同比下降 18%。我們的業績反映了強勁的收入增長，但部分被應收賬款增長和費用增加推動的撥備增加所抵消。本季度的趨勢是貸款強勁增長，儘管我們投資於合規管理和技術以及強大的資本和流動性狀況，但效率比率較低。更多詳細信息請參見幻燈片 5。

Net interest income was up $567 million year-over-year or 22%. Our net interest margin ended the quarter at 11.06%, up 12 basis points from the prior year and down 28 basis points sequentially. The benefits from higher prime rates were offset by higher funding costs and increased promotional balances. Receivable growth was robust. Card increased 19% year-over-year, reflecting a lower payment rate versus the prior year and modest sales growth. The card payment rate remained stable quarter-over-quarter and about 200 basis points over 2019 levels. Sales volume grew 3% in the quarter. Through mid-July, growth continued to slow and was up about 1%.

淨利息收入同比增長 5.67 億美元，增幅 22%。本季度末，我們的淨息差為 11.06%，比上年同期上升 12 個基點，比上一季度下降 28 個基點。較高優惠利率帶來的好處被較高的融資成本和增加的促銷餘額所抵消。應收賬款增長強勁。卡同比增長 19%，反映出支付率較上年較低且銷售額增長溫和。卡支付率環比保持穩定，比 2019 年水平高約 200 個基點。本季度銷量增長 3%。到 7 月中旬，增長繼續放緩，增幅約為 1%。

Turning to our noncard products. Personal loans were up 27%, driven by strength in originations over the past year. We continue to experience strong consumer demand while staying disciplined in our underwriting. Deposit growth in the quarter was solid with average consumer deposits up 20% year-over-year and 4% sequentially. Our direct-to-consumer balances grew $2 billion and consumer deposits made up 66% of our total funding mix. We continue to target 70-plus percent of funding from deposits.

轉向我們的非卡產品。在過去一年發放量強勁的推動下，個人貸款增長了 27%。我們繼續感受到強勁的消費者需求，同時保持承保紀律。本季度存款增長穩健，平均消費者存款同比增長 20%，環比增長 4%。我們的直接面向消費者的餘額增長了 20 億美元，消費者存款占我們總資金組合的 66%。我們的目標仍然是 70% 以上的資金來自存款。

Looking at other revenue on Slide 6. Noninterest income increased $98 million or 16%. This was partially due to a $42 million loss on our equity investments in the prior year quarter compared to a $1 million gain this quarter. Adjusting for these, our noninterest income was up 9%, primarily driven by loan fee income.

查看幻燈片 6 上的其他收入。非利息收入增加了 9800 萬美元，即 16%。部分原因是上一季度我們的股權投資虧損 4200 萬美元，而本季度收益為 100 萬美元。對此進行調整後，我們的非利息收入增長了 9%，這主要是由貸款費用收入推動的。

Moving to expenses on Slide 7. Total operating expenses were up $181 million or 15% year-over-year and up 2% from the prior quarter, primarily driven by our investments in our compliance management systems. These investments impacted several of our expense line items. Looking at our major expense categories. Compensation costs were up $73 million or 14% primarily due to increased headcount. Marketing expense increased $14 million or 6% as we prudently invested for growth, particularly in our deposits and personal loan products. Our commitment to disciplined cost management has not changed, and we continue to target an efficiency ratio in the high 30s.

轉到幻燈片 7 上的費用。總運營費用同比增長 1.81 億美元，即 15%，比上一季度增長 2%，這主要是由我們對合規管理系統的投資推動的。這些投資影響了我們的幾個費用項目。看看我們的主要費用類別。薪酬成本增加了 7300 萬美元，即 14%，主要是由於員工人數增加。由於我們審慎投資增長，特別是在我們的存款和個人貸款產品方面，營銷費用增加了 1,400 萬美元，即 6%。我們對嚴格成本管理的承諾沒有改變，我們繼續以 30 左右的效率目標為目標。

Moving to credit performance on Slide 8. Total net charge-offs were 3.22%, 142 basis points higher than the prior year and up 50 basis points from the prior quarter. Consistent with our expectation, we are seeing credit normalization across all of our lending products. Looking ahead, in card, we continue to expect the seasoning of new account vintages and normalization of older vintages to result in higher losses through the back half of this year and into 2024.

轉到幻燈片 8 上的信貸表現。總淨沖銷率為 3.22%，比上年高 142 個基點，比上一季度高 50 個基點。與我們的預期一致，我們所有貸款產品的信貸正常化。展望未來，我們繼續預計新賬戶年份的成熟和舊年份的正常化將導致今年下半年至 2024 年的更高損失。

Turning to the allowance for credit losses on Slide 9. This quarter, we increased our reserve by $373 million, driven by our double-digit loan growth. Our reserve rate remained flat at 6.8%. Our outlook on the macro economy has improved modestly. We continue to monitor economic conditions and we'll make adjustments to our expectations as needed.

轉向幻燈片 9 上的信貸損失準備金。本季度，在兩位數貸款增長的推動下，我們增加了 3.73 億美元的準備金。我們的準備金率維持在 6.8% 不變。我們對宏觀經濟的展望略有改善。我們將繼續監控經濟狀況，並將根據需要調整我們的預期。

Looking at Slide 10. Our capital position remains robust. Our common equity Tier 1 for the period was 11.7%, well ahead of regulatory requirements. The cumulative impact of the correction to the financial statements related to the card misclassification reduced our CET1 ratio by approximately 20 basis points. In the quarter, we repurchased 6.8 million shares of common stock and declared a quarterly common dividend of $0.70 per share. As Roger indicated, we are reviewing our compliance, risk management and corporate governance and are in discussions with our regulators on these topics. While this is ongoing, we have decided to pause share repurchases including on Slide 11 with our outlook.

請看幻燈片 10。我們的資本狀況依然強勁。期內我們的一級普通股權益為 11.7%，遠高於監管要求。與卡錯誤分類相關的財務報表修正的累積影響使我們的 CET1 比率降低了約 20 個基點。本季度，我們回購了 680 萬股普通股，並宣布派發每股 0.70 美元的季度普通股股息。正如羅傑所指出的，我們正在審查我們的合規性、風險管理和公司治理，並與監管機構就這些主題進行討論。在此過程中，我們已決定暫停股票回購，包括幻燈片 11 中我們的展望。

There has been no change to our loan growth expectations to be in the low to mid-teens. We are updating our NIM expectations to be around 11% for the full year, reflecting a combination of slightly lower asset yields driven by promotional mix and higher funding costs. We are raising our guidance for operating expenses to be up low double digits. As previously indicated, we are seeing upward pressure on expenses from the build-out of our compliance management systems. And we are lowering our expected range of net charge-offs to 3.4% to 3.6% based on our current delinquencies and roll rates.

我們的貸款增長預期沒有變化，仍保持在十幾歲至十幾歲左右。我們將全年淨息差預期更新為 11% 左右，反映出促銷組合推動的資產收益率略有下降以及融資成本上升。我們正在將運營費用指引提高至低兩位數。如前所述，我們看到了合規管理系統建設帶來的費用上升壓力。根據我們當前的拖欠率和展期率，我們將淨沖銷的預期範圍降低至 3.4% 至 3.6%。

To wrap up, our business model continues to generate solid financial results, and our capital, funding and liquidity positions remain strong. We continue to invest in actions that drive sustainable, long-term performance enable us to achieve excellence in all parts of our business. With that, I'll turn the call back to our operator, Todd, to open the line for Q&A.

總而言之，我們的業務模式繼續產生穩健的財務業績，我們的資本、融資和流動性狀況依然強勁。我們繼續投資於推動可持續、長期績效的行動，使我們能夠在業務的各個方面實現卓越。這樣，我會將電話轉回給我們的接線員托德，以開通問答線路。

Thank you. (Operator Instructions) We'll take our first question from Rick Shane of JPMorgan.

謝謝。 （操作員說明）我們將回答摩根大通的 Rick Shane 提出的第一個問題。

Look, I'd love to understand a little bit the link between what you identified in terms of the miscalculation and then how that precipitated the sort of inquiry into governance and consumer tracking?

聽著，我很想了解一下您所發現的誤算之間的聯繫，以及它如何引發對治理和消費者跟踪的調查？

Sure. So the FDIC matter is not linked to the misclassification. And so the misclassification is a separate issue, that the FDIC matter is broadly around our compliance management system. It doesn't mean that the misclassification may not result in further regulatory action, but I don't want to speculate on that.

當然。因此，FDIC 事件與錯誤分類無關。因此，錯誤分類是一個單獨的問題，FDIC 問題廣泛圍繞我們的合規管理系統。這並不意味著錯誤分類可能不會導致進一步的監管行動，但我不想對此進行猜測。

Got it. And is the expectation when we've seen these in the past, that they result in things like memorandum of understanding and can do things like either constrained growth, limit repurchases and capital actions. How do you see this playing out? And most importantly, I think what everybody really wants to know is what is a reasonable time frame to get some further clarity here?

知道了。當我們過去看到這些時，我們期望它們會產生諒解備忘錄之類的東西，並且可以採取限制增長、限制回購和資本行動等措施。您如何看待此事的進展？最重要的是，我認為每個人真正想知道的是，進一步澄清的合理時間範圍是多少？

Yes. It's -- I don't want to speculate on the time frame of regulatory actions. I would say, to your point, though, they can take many forms. And so we're working through the draft with our regulators, and we'll make more information available and the consent order will itself be public once that's completed.

是的。我不想猜測監管行動的時間框架。不過，我想說，就你的觀點而言，它們可以採取多種形式。因此，我們正在與監管機構一起制定草案，我們將提供更多信息，一旦完成，同意令本身將被公開。

We'll take our next question from Betsy Graseck with Morgan Stanley.

我們將回答摩根士丹利的貝特西·格拉塞克 (Betsy Graseck) 提出的下一個問題。

This is Jeff Adelson on for Betsy. Just -- I appreciate all the sensitivity around this and understand you're pausing the buyback. I guess -- this is similar to what we saw last year in terms of regulatory issue and getting ahead of the buyback or freezing the buyback. Just wondering maybe if there's a way to speak to how these 2 issues kind of compare to the last year's student loan servicing issue maybe in terms of scoping complexity?

我是貝特西的傑夫·阿德爾森。只是——我感謝圍繞此事的所有敏感性，並理解您正在暫停回購。我想，這與我們去年在監管問題以及提前回購或凍結回購方面看到的情況類似。只是想知道是否有一種方法可以將這兩個問題與去年的學生貸款服務問題進行比較，也許在範圍複雜性方面？

Yes. I'll cover that piece and then maybe John can talk a bit about the buyback. So I would say the consent order in student loan servicing was a compliance matter. And so I think there is a link between that and the broader focus on our compliance management system. With that, maybe I'll let John talk a bit about the buyback.

是的。我將介紹那篇文章，然後約翰也許可以談談回購問題。所以我想說，學生貸款服務的同意令是一個合規問題。因此，我認為這與更廣泛地關注我們的合規管理體系之間存在聯繫。說到這裡，也許我會讓約翰談談回購的事情。

Great. And thanks, Roger. And as it relates to the buyback, we had robust conversations internally whether or not to pause the buyback and what management recommended to the Board was that we pause the buyback as we work through the details of these compliance and risk management issues and are in conversations with our regulators.

偉大的。謝謝，羅傑。由於與回購相關，我們在內部就是否暫停回購進行了深入的討論，管理層向董事會建議的是，我們在處理這些合規和風險管理問題的細節並與監管機構進行對話時暫停回購。

I want to reiterate the following though. Our capital allocation priorities remain consistent. So first, invest in the business in growth and certainly through this year and into next year into compliance and risk management. And second, the priority will be to return excess capital to shareholders. So no change in terms of the 2 primary capital allocation priorities.

但我想重申以下幾點。我們的資本配置優先事項保持一致。因此，首先，投資於業務增長，當然今年和明年投資於合規和風險管理。其次，首要任務是將多餘資本返還給股東。因此，兩個主要資本配置優先事項沒有變化。

I also want to focus your attention on to the strong capital generation that the business delivered in the quarter and has delivered historically. So we're hoping that we kind of work through these issues in an expedited fashion, but timing, I can't be specific on. So -- would that -- the buyback will provide as much clarity on the timing of resumption when we have information on that.

我還希望大家關注該業務在本季度以及歷史上所實現的強勁資本生成。因此，我們希望能夠盡快解決這些問題，但具體時間我無法透露。因此，當我們掌握相關信息時，回購將為恢復時間提供盡可能清晰的信息。

Okay. And just maybe shifting gears a bit here. Just wanted to see if we could get an update on what you're seeing in the consumer in your book today. Could you maybe also give us an update on the spend trajectory you've been seeing so far in July? I know you talked about the growth rate slowing down to 3% in recent months, wondering if we're seeing something similar from here.

好的。也許只是在這裡稍微改變一下。只是想看看我們是否可以了解您今天在書中看到的消費者的最新情況。您能否向我們介紹一下您 7 月份迄今為止的支出軌蹟的最新情況？我知道您談到近幾個月增長率放緩至 3%，想知道我們是否會看到類似的情況。

Yes. So it has slowed down further so far in July, so probably closer to 1%. Not necessarily as bad as it sounds in terms of the health of the consumer because you've got some very challenging comps compared to last year's growth as well as the very, very high level of new accounts we put on last year. And I think overall, in terms of payment side, delinquencies and losses, as John said, are sort of normalizing right on the path we thought they were and here, I think that the strength of the job market is very constructive for our sort of prime consumer base.

是的。因此，7 月份迄今為止，增速進一步放緩，可能接近 1%。就消費者的健康而言，並不一定像聽起來那麼糟糕，因為與去年的增長以及我們去年新增賬戶的水平相比，你有一些非常具有挑戰性的競爭。我認為總體而言，就支付方面而言，拖欠和損失，正如約翰所說，正在按照我們認為的方式正常化，我認為就業市場的強勁對於我們的主要消費者基礎非常有建設性。

We'll take our next question from Ryan Nash with Goldman Sachs.

我們將回答高盛瑞安·納什的下一個問題。

Roger, again, I know that we're probably eliminating what we could say here on the compliance side. But I guess just a broader question. Can you maybe just help us understand what are the areas that you feel that the company has underinvested in and maybe just give us a framework for what you guys are doing internally to fix these. I understand that John had talked about raising costs, but can you give us a little bit more color in terms of what the investments you're making and what you think the time line is to get these done?

羅傑，再次，我知道我們可能正在消除我們在合規方面可以說的內容。但我想這只是一個更廣泛的問題。您能否幫助我們了解您認為公司投資不足的領域，或者為我們提供一個框架，說明你們內部正在採取哪些措施來解決這些問題。據我所知，約翰談到了提高成本，但您能否向我們介紹一下您正在進行的投資以及您認為完成這些工作的時間表？

Sure. John can maybe provide more color on the time line. I would say it's a multiyear, but it's also something that we have been investing in over the last couple of years. So as you think about your compliance management system, it's everything from risk identification, sort of process mapping, building controls or change management processes, the resources you have around risk management in the first line, the resources you have in the second line in terms of the compliance function, testing, the internal audit, our governance processes.

當然。約翰也許可以在時間線上提供更多的色彩。我想說這是一個多年的過程，但這也是我們過去幾年一直在投資的東西。因此，當您考慮您的合規管理系統時，它包括風險識別、流程映射、構建控製或變更管理流程、您在第一線風險管理方面擁有的資源、您在第二線的合規職能、測試、內部審計、我們的治理流程方面擁有的資源。

And so we are determined to be as strong on the compliance side and it's excellent there as we are around customer experience, data and analytics, every other aspect of our business model. So this is our top priority and the investment is both on the technology side, outside consultants, but also in terms of head count here at Discover.

因此，我們決心在合規方面保持強大的實力，並且在客戶體驗、數據和分析以及我們業務模式的每個其他方面都表現出色。因此，這是我們的首要任務，投資既包括技術方面、外部顧問，也包括 Discover 的員工人數。

Yes. And then Ryan, on the trajectory. And so I made this comment publicly about 1.5 months ago. 2019 to 2023, we increased our spend in compliance and I'll say, tangential items to ensure compliance works as we wish it to work. I indicated it was about an increase of $250 million as we relooked at it. We were going to accelerate that spend at probably $300 million increase from 2019 and a $200 million increase, '22 to '23. Now the implications for that on '24, where we sit today, we expect once we achieve that level in '23 to be relatively consistent into '24. And then as we kind of shape this piece of our business into something that we desire, regulators desire and our shareholders deserve, we expect that expense burn to reduce.

是的。然後是瑞安，在軌道上。所以我大約 1.5 個月前公開發表了這個評論。 2019 年至 2023 年，我們增加了合規方面的支出，我想說的是，一些無關緊要的項目，以確保合規工作按照我們希望的方式進行。當我們重新審視時，我表示增加了約 2.5 億美元。我們計劃加快支出，從 2019 年開始大約增加 3 億美元，從 22 年到 23 年增加 2 億美元。現在，我們今天所處的 24 年的影響，我們預計一旦我們在 23 年達到這一水平，到 24 年就會相對一致。然後，當我們將這部分業務塑造成我們想要的、監管機構想要的和股東應得的東西時，我們預計費用消耗會減少。

We appreciate all that color. And then maybe just on credit. I think Roger might have talked about the normalization of the front book as well as expectations for the back book to continue to normalize, but you took the credit loss range down a bit. So can you maybe just talk about, one, where you're seeing the improved performance? And John, as you look out, maybe just talk about your confidence in the curve on losses bending as we approach sort of the midpoint of next year?

我們欣賞所有這些顏色。然後也許只是賒賬。我認為羅傑可能已經談到了前賬本的正常化以及對後賬本繼續正常化的預期，但你把信用損失範圍縮小了一點。那麼您能否談談，第一，您在哪些方面看到了性能的改進？約翰，正如您所看到的，也許只是談談您對隨著我們接近明年中點而出現的損失曲線的信心？

Yes. Great. So yes. The tightening of the range was reflective of a couple of things. So first, as time moves on, we get more and more comfort with our forecasting on it. And to date, our forecasting has been right on top of the actuals or actuals have been right on top of the forecast. So that gave us comfort. Second is as time goes on, we can move from the analytical model to a more kind of traditional roll rate model that gives us a greater level of comfort around the charge-off and delinquency rates, 30 days out to 180 days out. So that gave us comfort to tighten that range. And then on top of that, certainly, the jobs data and the forecast around, employment gave us additional comfort.

是的。偉大的。所以是的。範圍的收緊反映了幾件事。首先，隨著時間的推移，我們對它的預測越來越滿意。迄今為止，我們的預測正好位於實際情況之上，或者實際情況正好位於預測之上。這給了我們安慰。其次，隨著時間的推移，我們可以從分析模型轉向更傳統的滾動率模型，這使我們對 30 天到 180 天的沖銷率和拖欠率更加放心。所以這讓我們放心地收緊這個範圍。當然，除此之外，就業數據和預測也給我們帶來了額外的安慰。

In terms of what we're seeing with the portfolio, exactly what I said in the prepared comments. So the newer vintages seasoning to expectation and older vintages basically normalizing to kind of 2019 in levels. In terms of the shape of curve, what we expect charge-offs to do in the back half of this year is the acceleration in terms of the rate of charge-off to begin to slow and currently, we're expecting kind of charge-offs to peak in the second half of '24. It may push a little bit into '25. But right now, we're seeing it in the second half of '24 and then reach the level which likely will stabilize that for 2 to 3 quarters after.

就我們在投資組合中看到的情況而言，這正是我在準備好的評論中所說的。因此，較新年份的年份達到了預期，而較舊年份的年份則基本正常化至 2019 年的水平。就曲線形狀而言，我們預計今年下半年的沖銷將加速，沖銷速度將開始放緩，目前，我們預計沖銷將在 24 年下半年達到頂峰。它可能會稍微推遲到 25 年。但現在，我們看到它在 24 年下半年出現，然後達到可能會在之後 2 到 3 個季度穩定的水平。

We'll take our next question from John Hecht with Jefferies.

我們將回答約翰·赫克特和杰弗里斯提出的下一個問題。

First one is that we've talked about you've given us some sort of good trajectory of the normalization of the credit trends, which, I guess, occurs later this year or early in next year. I'm wondering, given kind of the comps and stabilization of inflation and so forth, when do you expect to see normalization of loan growth and your guys' opinions, what is kind of the normalized level of loan growth?

第一個是，我們已經討論過您為我們提供了信貸趨勢正常化的某種良好軌跡，我想這將在今年晚些時候或明年初發生。我想知道，考慮到通貨膨脹的比較和穩定等因素，您預計什麼時候會看到貸款增長正常化，你們的意見是，貸款增長正常化水平是多少？

Yes. So certainly, real robust loan growth in the first half of this year and the last quarter of 2022. We expect the rate of increase to slow certainly in the third and fourth quarter and also against really, really strong comps from 2022. And traditionally, what this business has delivered is loan growth somewhere between 2x and 4x GDP growth. Now we don't know what GDP is going to look like right now into '24. But I would say this, we did cut the edges on the lower credit quality, which will impact new account growth in card for the balance of this year. We're seeing, as Roger indicated, and I mentioned in my comments, sales growth to slow and probably stabilize in the single digit. So that will also impact loan growth for the balance of this year and into next year. So the stabilized number is a multiple of GDP typically, unless there's some change to the macros that indicates it's a good investment to either open up credit or appropriate to tighten credit.

是的。因此，可以肯定的是，今年上半年和 2022 年最後一個季度的貸款增長將真正強勁。我們預計第三季度和第四季度的增長率肯定會放緩，而且相對於 2022 年真正強勁的比較而言也是如此。傳統上，這項業務帶來的貸款增長是 GDP 增長的 2 倍到 4 倍之間。現在我們不知道 24 世紀 GDP 會是什麼樣子。但我想說的是，我們確實消除了信貸質量較低的影響，這將影響今年剩餘時間卡的新賬戶增長。正如羅傑所指出的，以及我在評論中提到的，我們看到銷售增長放緩，並可能穩定在個位數。因此，這也將影響今年剩餘時間和明年的貸款增長。因此，穩定的數字通常是 GDP 的倍數，除非宏觀經濟發生一些變化，表明開放信貸或適當收緊信貸是一項良好的投資。

Okay. That's a helpful framework to think about. And then with respect to the expense guide, I think you talked about some investment in compliance and some investment in technology and so forth. I'm wondering, is there -- maybe talk about the competitive climate at this point relative to the past few years? Is there any spending required from a competitive perspective? Can you characterize the overall competitive environment as well?

好的。這是一個值得思考的有用框架。然後關於費用指南，我認為您談到了一些合規投資和一些技術投資等等。我想知道，是否可以談談目前相對於過去幾年的競爭氛圍？從競爭角度來看是否需要任何支出？您能否描述一下整體競爭環境？

I think we continue to see good results from the way we put to work on the marketing front in terms of our cost per account. Obviously, we've talked about the relaunch of Cashback Debit. We'll put some money against that, including the mass market campaign in the fall. But we have been excited with what we're seeing in terms of the cost per funded account there. So while the competitive environment is always intense across all of our businesses, we feel good about how our value proposition is competing out there across all of our consumer products.

我認為，就每個帳戶的成本而言，我們在營銷方面的工作方式繼續取得了良好的成果。顯然，我們已經討論過重新推出現金返還借記卡。我們將為此投入一些資金，包括秋季的大眾市場活動。但我們對每個注資賬戶的成本感到興奮。因此，雖然我們所有業務的競爭環境總是很激烈，但我們對我們的價值主張在所有消費產品中的競爭方式感到滿意。

Our next question comes from Don Fandetti with Wells Fargo.

我們的下一個問題來自富國銀行的 Don Fandetti。

John, I was wondering if you could talk on the merchant miscalculation. Was that found internally? Or was that brought to you by a regulator or a third party?

約翰，我想知道你能否談談商人的誤算。是內部發現的嗎？或者是由監管機構或第三方向您提供的？

It was found internally.

是內部發現的。

Okay. Great. And then on NIM, it sounded like the trajectory was pretty good in general, and now it's going to be around 11%. Is there more promotional than you thought or more deposit competition? Can you talk a bit about that?

好的。偉大的。然後在 NIM 上，聽起來總體軌跡相當不錯，現在將在 11% 左右。是否有比您想像的更多的促銷活動或更多的存款競爭？你能談談這個嗎？

Yes. The -- it's a little bit of both actually. So we ended '22 at 11.04%. We said that we would be in our initial guidance, up modestly. And then in the first quarter call, we said NIM had likely peaked and then it would begin to move downward and what I'll say, normalize, likely to a higher level than it has been historically. So in the quarter, the reason that we tweaked that guidance was we are investing in promotional balances. So attracting new customers or building balances with existing customers. Now the returns on those offers are fantastic.

是的。事實上，兩者兼而有之。所以我們 22 年結束時的增長率為 11.04%。我們說過，我們將在最初的指引中適度上調。然後在第一季度的電話會議中，我們表示淨息差可能已見頂，然後將開始下降，我想說的是，正常化，可能會達到比歷史水平更高的水平。因此，在本季度，我們調整該指導的原因是我們正在投資於促銷餘額。因此吸引新客戶或與現有客戶建立平衡。現在，這些優惠的回報非常可觀。

The impact on NIM in the short term in the promotional period, it's minor, but given our activity there, it took a few points of net interest margin out, and we thought that was an important impact to communicate. Second, in terms of deposit competition, we had said that we thought the beta would come in somewhere around 60% to 70%. What we've seen in -- late in the first quarter and into this quarter was our competitive set being more aggressive in terms of price increases. And as I've communicated in the past, we don't seek to be a price leader here. We try to compete on our brand, our customer offering, our digital assets that are first class in order to attract deposit customers. And we've been very successful, as you can tell by the numbers there. But part of the proposition is also price. So what we're seeing now is beta is likely to be north of 70% which is impacting net interest margin to the extent I just talked about in the guidance point. So those 2 factors are playing most substantially on the revised outlook.

促銷期間短期內對NIM的影響很小，但考慮到我們在那裡的活動，淨利差減少了幾個點，我們認為這是一個需要溝通的重要影響。其次，就存款競爭而言，我們曾說過，我們認為貝塔值會在 60% 到 70% 左右。我們在第一季度末和本季度看到的是，我們的競爭對手在價格上漲方面更加激進。正如我過去所傳達的，我們並不尋求成為價格領導者。我們試圖在我們的品牌、我們的客戶服務和我們一流的數字資產上進行競爭，以吸引存款客戶。正如您可以從那裡的數字看出的那樣，我們非常成功。但價格也是這一主張的一部分。因此，我們現在看到的貝塔值可能會超過 70%，這對淨息差的影響達到了我剛才在指導點中談到的程度。因此，這兩個因素對修訂後的前景發揮著最重要的作用。

We'll take our next question from Sanjay Sakhrani with KBW.

我們將接受 KBW 的 Sanjay Sakhrani 提出的下一個問題。

I have a follow-up on a couple of points made on the consent order. Maybe the first one, just on the share repurchase pause. Is that action taken in terms of prudence or out of an abundance of caution? Or do you think that there could be a material impact to your capital position? And I guess, secondly, just on -- John, you talked about the pressures on expenses into 2024. I guess like are there -- is there a leverage on other expense line to sort of moderate the overall implications for the year?

我對同意令中提出的幾點進行了跟進。也許是第一個，就在股票回購暫停時。採取這一行動是出於謹慎還是出於高度謹慎？或者您認為這可能會對您的資本狀況產生重大影響嗎？其次，我想，約翰，您談到了 2024 年支出的壓力。我想，其他支出項目是否有槓桿作用來緩解今年的總體影響？

Yes. Thanks, Sanjay. So the decision on the share repurchase was out of prudence. We have done a number of tests internally stressing a number of factors. So that for example, the CCAR process we go through includes extreme stress. We tested that off and ran some simulations and the output of that was that both capital and liquidity, even in an extreme situation remained well above regulatory requirements. So we feel comfortable about our capital and liquidity. The issue on the share repurchase was, again, out of prudence given what we have going on in the organization, and we wanted to make sure that our actions are consistent with the right message in terms of being conservative and dealing with the first level of priority.

是的。謝謝，桑傑。因此，回購股份的決定是出於謹慎考慮。我們在內部進行了許多測試，強調了許多因素。例如，我們經歷的 CCAR 過程包括極大的壓力。我們對此進行了測試並進行了一些模擬，其結果是，即使在極端情況下，資本和流動性仍然遠高於監管要求。因此，我們對我們的資本和流動性感到滿意。考慮到我們組織中正在發生的事情，關於股票回購的問題再次是出於謹慎，我們希望確保我們的行動在保守和處理第一級優先事項方面與正確的信息一致。

In terms of expense leverage, we continue to look at all of the lines and all of the investments we make in our expense base. And the incident management situation we're dealing with in terms of resources to get that under control, that's a significant investment. So resources supplement technology, people and consultants, certainly an investment. But on the indirect side, we continue to leverage our procurement organization and ensure that first, we concentrate on demand management and second, on making sure there's a fair value exchange. So that's the plan right now and will be the plan through the balance of this year.

在費用槓桿方面，我們繼續關注我們在費用基礎上進行的所有項目和所有投資。我們正在處理的事件管理情況是為了控制事件的資源，這是一項重大投資。因此，資源補充技術、人員和顧問，當然是一項投資。但在間接方面，我們繼續利用我們的採購組織，確保首先專注於需求管理，其次確保公平的價值交換。這就是現在的計劃，也將是今年餘下時間的計劃。

I guess a follow-up of this for Roger. I know you've gotten this question in the past, and I'm just thinking about the higher teasers and such. I mean, what makes you comfortable growing sort of mid-teens, high-teens, above the really strong lapping of very strong growth a year ago. I mean, I'm just thinking about just the complexion of the accounts you're bringing in that makes you very comfortable here because it's obviously having some implications on the NIM.

我想羅傑的後續行動。我知道你過去曾被問過這個問題，我只是在考慮更高的預告片等。我的意思是，是什麼讓你能夠輕鬆地成長到十幾歲左右，高於一年前非常強勁的增長速度。我的意思是，我只是考慮您引入的賬戶的複雜性，這讓您在這裡感到非常舒服，因為它顯然對 NIM 產生了一些影響。

Yes. Good question, Sanjay. You have seen that growth start to slow a bit. And I think it isn't necessarily that far out of line with what you're seeing from our other, I'd say, sophisticated, prime-focused competitors, it is really strong demand for the product. And as we've been clear, we have been tightening, not loosening credit and are watching the accounts we book very carefully.

是的。好問題，桑傑。您已經看到增長開始放緩。我認為這並不一定與您從我們其他成熟的、專注於主要競爭對手的競爭對手那裡看到的情況相去甚遠，這實際上是對該產品的強勁需求。正如我們所明確的那樣，我們一直在緊縮信貸，而不是放鬆信貸，並且非常仔細地關注我們登記的賬戶。

And so we're always ready to make adjustments, whether it's on the card product, the personal loan or elsewhere. But again, we feel good and are closely monitoring the performance. Within the credit, we're making adjustments continuously, both on the portfolio side and the new account side. But these are very strong new accounts we're bringing in. And I think part of it is the differentiated value proposition that Discover offers continues to resonate well with our target customer.

因此，我們隨時準備做出調整，無論是在卡產品、個人貸款還是其他方面。但我們再次感覺良好，並正在密切關注表現。在信貸方面，我們在投資組合方面和新賬戶方面不斷進行調整。但我們引入的這些都是非常強大的新客戶。我認為部分原因是 Discover 提供的差異化價值主張繼續與我們的目標客戶產生良好的共鳴。

We'll take our next question from Kevin Barker with Piper Sandler.

我們將回答凱文·巴克和派珀·桑德勒提出的下一個問題。

I just wanted to follow up on the expenses in particular. You said you continue to target an efficiency ratio in the high 30s. Could there be a time where you may have to make additional investments, particularly around compliance that would have you go above the high 30s efficiency ratio for a short period of time before returning back to it just given the near-term impacts of both additional marketing spend on the debit account and the compliance issues?

我只是想特別跟進一下費用。您說過您的目標是繼續將效率比控制在 30 左右。是否有一天您可能需要進行額外投資，特別是在合規性方面，考慮到額外營銷支出對借方賬戶的短期影響以及合規性問題，您可能需要在短時間內將效率比提高到 30 多歲以上，然後再回到原來的水平？

Sure. So as we sit here today, we feel comfortable with what we shared in terms of low double-digit expense growth this year. We've taken a preliminary look at next year. We'll share that at an appropriate time after we kind of review and get our plan approved by our Board. But I'm feeling like it's very, very achievable, and that's why we enunciated that target or that goal. But I would say this, as we see opportunities to grow profitably and not -- no contradiction to Roger's point earlier about the demand for our products but we'll continue to take a look and invest for the medium term and longer term. And we're going to do that on the growth side. We're focused right now on the compliance side. And we'll dial each of the expense levers in order to ensure we achieve the results that our shareholders want, that our Board expects and that the management team expects.

當然。因此，當我們今天坐在這裡時，我們對今年兩位數的低支出增長感到滿意。我們已經初步審視了明年的情況。在我們進行審查並獲得董事會批准我們的計劃後，我們將在適當的時間分享這一點。但我覺得這是非常非常可以實現的，這就是為什麼我們闡明了這個目標。但我想說的是，因為我們看到了盈利增長的機會，而不是——這與羅傑之前關於我們產品需求的觀點並不矛盾，但我們將繼續關注並進行中期和長期投資。我們將在增長方面做到這一點。我們現在的重點是合規方面。我們將調整每一個費用槓桿，以確保我們實現股東想要的結果、董事會期望的結果以及管理團隊期望的結果。

Are there any particular areas where you see the most opportunity to create efficiencies, whether it's marketing or head count or anything out there that you see that can allow you to continue to hit your goals?

是否有任何特定領域是您認為最有機會提高效率的領域，無論是營銷、人員數量還是您認為可以讓您繼續實現目標的任何領域？

Yes. So we're investing in advanced analytics that we're driving efficiencies in our rewards cost. We continue to look at third-party spend and have achieved great results in terms of year-over-year reduction in unit costs. The situation this year is that we've invested heavily in resources, people. So we're up -- we're up about 3,000 people this year. So when you bring on additional people, both in collections and customer service as well as salary personnel, there's other costs that go along with it.

是的。因此，我們正在投資高級分析，以提高獎勵成本的效率。我們繼續關注第三方支出，並在單位成本逐年降低方面取得了巨大成果。今年的情況是，我們在資源、人員方面投入了大量資金。所以我們增加了——今年我們增加了大約 3,000 名員工。因此，當您聘請更多人員（無論是收款人員、客戶服務人員還是薪資人員）時，還會產生其他成本。

So as we manage through this situation, I continue to believe there will be opportunities to drive efficiencies by combining like activities, taking a look at how resources are deployed, organizational structures and over time, optimizing that. But right now, with the situation we're in, we've decided that the first priority is get the right resources in to focus on the issues we've talked about. And then we're going to be able to drive efficiencies in the future.

因此，當我們應對這種情況時，我仍然相信，將有機會通過結合類似的活動來提高效率，研究如何部署資源、組織結構，並隨著時間的推移對其進行優化。但現在，鑑於我們所處的情況，我們決定首要任務是獲得正確的資源來關注我們所討論的問題。然後我們將能夠在未來提高效率。

We'll take our next question from Mihir Bhatia with Bank of America.

我們將回答美國銀行 Mihir Bhatia 提出的下一個問題。

I wanted to start maybe just on the business and the application quality of new applicants that you're seeing. I think you mentioned in response to John's question, tightening underwriting, I guess, firstly, was that the new action you took in the second quarter? And then just related to that tightening of underwriting and application quality. I was wondering just if you -- I know you've talked in the past about monitoring -- actively monitoring the health of the consumer and the portfolio. Was there something you're seeing that is flashing red or caution that's making you tight the underwriting further here? Or -- just trying to understand [who's the] demand environment who's applying for a new loan currently? What's driving some of the underwriting changes?

我想首先談談您所看到的新申請人的業務和申請質量。我想你在回答約翰的問題時提到了收緊承保，我想，首先，這是你在第二季度採取的新行動嗎？然後就與承保和申請質量的收緊有關。我想知道你——我知道你過去曾談論過監控——是否積極監控消費者和投資組合的健康狀況。您是否看到某些閃爍紅色或警告的東西讓您進一步收緊承保？或者——只是想了解目前正在申請新貸款的[誰是]需求環境？是什麼推動了一些承保變化？

Yes. Good question. So the tightening was not in the second quarter and was not in response to something we're seeing. And actually, in terms of applicant quality, whether it's for home equity, personal loans, student loan or a card, where we're seeing very stable characteristics in terms of average FICO, in terms of the custom scores we use. So it was a series of changes we made, I would say, in prior quarters, but a lot of stability in terms of the quality of applicant over the course of this quarter.

是的。好問題。因此，緊縮政策不是在第二季度進行的，也不是對我們所看到的情況的回應。事實上，就申請人質量而言，無論是房屋淨值、個人貸款、學生貸款還是銀行卡，我們都看到平均 FICO 和我們使用的自定義分數具有非常穩定的特徵。因此，我想說，我們在前幾個季度做出了一系列改變，但在本季度申請人的質量方面保持了很大的穩定性。

Got it. And then maybe switching gears to the debit product that was relaunched. Can you talk just longer term strategically, what is the -- I guess, the thinking behind that product, what is the goal? Is the idea there "Hey, this is an opportunity to deepen relationships with customers and lower" And how will that benefit you? Will it be through better NIM because they're offering rewards, you can -- may necessarily need to offer as higher interest rate, like -- just talk a little bit more strategically about why that product makes sense to invest in for Discover and how you expect the growth trajectory of that product to go over the next few quarters here?

知道了。然後也許會轉向重新推出的借記卡產品。您能否從長遠的戰略角度談談，我想，該產品背後的想法是什麼，目標是什麼？是否有這樣的想法：“嘿，這是加深與客戶關係並降低成本的機會”這對您有何好處？是否會通過更好的NIM，因為他們提供獎勵，你可以——可能必然需要提供更高的利率，比如——只是更具戰略性地談談為什麼該產品對Discover來說是有意義的投資，以及你預計該產品在未來幾個季度的增長軌跡將如何？

Yes. Great question. So our aspiration is to be the leading digital bank. And so when you think about a digital bank, you think about the core DDA or debit product, and because we have a proprietary network, we can offer rewards in debit in a way no other large bank can and it builds on our heritage around cash back and as the inventor of credit card rewards. So it's not just to cross-sell to our card customers. We think that this can pretty quickly become a significant entry point into the franchise for new customers.

是的。很好的問題。因此，我們的願望是成為領先的數字銀行。因此，當您想到數字銀行時，您會想到核心 DDA 或借記卡產品，因為我們擁有專有網絡，所以我們可以以其他大型銀行無法做到的方式提供借記卡獎勵，並且它建立在我們作為信用卡獎勵發明者的現金返還傳統之上。因此，這不僅僅是向我們的信用卡客戶進行交叉銷售。我們認為這很快就會成為新客戶進入特許經營權的重要切入點。

And then over time, much as we've done on the card side, if you can provide a superior value proposition and customer experience, they will want to buy other products from you whether that's a savings account and savings is accounts where you also have the checking count tend to have a lower beta or the card product. So again, a very important initiative for us. I think over time, it will help continue transforming Discover. And we're excited for the potential. And you'll see significant marketing against it this fall.

然後隨著時間的推移，就像我們在卡方面所做的那樣，如果你能夠提供卓越的價值主張和客戶體驗，他們就會想從你那裡購買其他產品，無論是儲蓄賬戶還是儲蓄賬戶，你也有支票計數往往有較低的貝塔值或卡產品。這對我們來說又是一個非常重要的舉措。我認為隨著時間的推移，它將有助於繼續改變 Discover。我們對這種潛力感到興奮。今年秋天你會看到針對它的重大營銷活動。

Got it. And then just my last question. Just coming back to the compliance issue. Look, I appreciate it's difficult to provide too many details right now. But maybe just on the timing, give us some frame of reference, like given that this is -- it sounds like the FDIC consent order also is related to compliance issues. You have the student loan issue. Now you have this issue. Does that entail a much longer review period? Or do you think this can go pretty quickly here, like a quarter to go through? I mean, again, I'm not saying when you resume buybacks, but at least like when you expect the review to be complete, what are you trying to -- how quickly are you trying to complete the review internally? And then I understand maybe the buyback discussion probably involves regulators and could be -- it's a little bit harder to size, but at least the review maybe you can tell us, what your target is for like when you're trying to complete the review?

知道了。然後是我的最後一個問題。回到合規問題。看，我知道現在很難提供太多細節。但也許只是在時間上，給我們一些參考框架，比如，聽起來 FDIC 同意令也與合規問題有關。您有學生貸款問題。現在你有這個問題。這是否需要更長的審查期？或者你認為這會很快進行，比如四分之一的時間？我的意思是，我不是說你什麼時候恢復回購，但至少就像你期望審查完成時一樣，你想做什麼——你想多快完成內部審查？然後我明白，也許回購討論可能涉及監管機構，而且可能——確定規模有點困難，但至少審查也許你可以告訴我們，當你試圖完成審查時，你的目標是什麼？

Yes. And to frame the compliance issue, I would not over focus on the regulatory portion. This is something where we, as a team, know we are not where we want to be, and it is our top priority. So it is aligned with the views of the regulators but our focus is taking many forms from simplifying our architecture, automating manual processes, streamlining and standardizing business processes, bring on some great new talent, as John talked about, into the firm. And we know that the result will not just be better compliance, but a better customer experience, a more efficient organization. So the regulatory piece is important. But I would say what is most important is the commitment from me, the team, the Board, on achieving excellence in this area. That will be a multiyear initiative. But again, I think, critically important to the future of the company and one that we, as a team, are very excited about. I would also separate that from the buyback. But again, it will be a journey on the compliance side, but one that we are 100% committed to.

是的。為了框架合規問題，我不會過度關注監管部分。作為一個團隊，我們知道我們還沒有達到我們想要的目標，但這是我們的首要任務。因此，它與監管機構的觀點一致，但我們的重點是採取多種形式，包括簡化架構、自動化手動流程、簡化和標準化業務流程，以及為公司引進一些優秀的新人才，正如約翰所說。我們知道，結果不僅是更好的合規性，而且是更好的客戶體驗和更高效的組織。所以監管部分很重要。但我想說，最重要的是我、團隊、董事會對在這一領域取得卓越成就的承諾。這將是一項多年舉措。但我再次認為，這對公司的未來至關重要，我們作為一個團隊對此感到非常興奮。我還將其與回購分開。但同樣，這將是合規方面的一段旅程，但我們將 100% 致力於這一旅程。

We'll take our next question from Erika Najarian with UBS.

我們將回答瑞銀集團的埃里卡·納賈里安 (Erika Najarian) 提出的下一個問題。

This is [Nick Logo] on for Erika. Just one more around the consent order and compliance issues. As you think about the operational complexity of the businesses you operate in and as you go through your view looking into these issues, do you feel like there may be an opportunity to take a closer look at some of the businesses you operate in, whether that might be student loans or anywhere else?

這是埃里卡​​的[尼克標誌]。只是關於同意令和合規問題的另一件事。當您思考您所經營的企業的運營複雜性並通過您的觀點調查這些問題時，您是否覺得可能有機會仔細研究您所經營的一些企業，無論是學生貸款還是其他任何地方？

Yes. I'll talk maybe more broadly about operational complexity and then John can talk about the businesses. I think there's a great opportunity to simplify whether it's -- we may have a similar process that is done differently. And again, we have a much more, I would say, homogenous set of businesses than just about any other bank of our size. So we think there are significant opportunities to simplify. And again, those won't just help from a compliance standpoint over time once the investments are made, it will also help on the efficiency side.

是的。我可能會更廣泛地談論運營複雜性，然後約翰可以談論業務。我認為這是一個很好的機會來簡化——我們可能有一個類似的流程，但方式不同。我想說，我們的業務比我們規模的任何其他銀行都要多得多。因此，我們認為有很大的機會進行簡化。再說一遍，一旦投資完成，這些不僅從合規的角度來看會有所幫助，而且還會在效率方面有所幫助。

Yes. And then regarding our businesses and products, we think about this in line with our capital allocation priorities, our connections to our customer base and what we can manage and manage well. So we didn't start today. Historically, we've looked at all our products, our returns. And as we look at those, we've made decisions to invest in order to drive growth or achieve compliance excellence. So we're going to continue to look at that. And if something is below our return targets, then we'll fix it and invest or we'll look at other alternatives. But certainly, the focus today is to take our existing products, make sure they're a good offering that we can deliver those in a compliant way and drive a good return for our shareholders.

是的。然後，關於我們的業務和產品，我們會根據我們的資本配置優先級、我們與客戶群的聯繫以及我們可以管理和管理得好來考慮這一點。所以我們今天沒有開始。從歷史上看，我們審視了我們所有的產品和退貨。當我們審視這些問題時，我們做出了投資決策，以推動增長或實現卓越的合規性。所以我們將繼續關注這一點。如果某些事情低於我們的回報目標，那麼我們將修復它並進行投資，或者我們將考慮其他替代方案。但當然，今天的重點是利用我們現有的產品，確保它們是一個好的產品，我們可以以合規的方式提供這些產品，並為我們的股東帶來良好的回報。

We'll take our next question from Bob Napoli with William Blair.

我們將回答鮑勃·納波利和威廉·布萊爾提出的下一個問題。

Just from a big picture perspective, with the competitive environment, the compliance environment, Roger, as you look at your business, what is your confidence that Discover can deliver the types of returns that it has that investors have come used to over the last 10 to 20 years? Is there -- are you confident in delivering those returns with the higher compliance bar or the competitive set?

從宏觀角度來看，在競爭環境、合規環境下，羅傑，當您審視您的業務時，您對 Discover 能夠提供投資者在過去 10 到 20 年裡已經習慣的回報類型的信心有多大？您是否有信心以更高的合規標准或更具競爭力的組合來提供這些回報？

Yes. I'd start by saying yes, right. This is an investment we need to make. It is the top priority for the company but one that I think we will be able to do to fix. And again, over time, we'll see benefits not just in compliance, but in a better customer experience as well as more efficient.

是的。我首先會說是的，對。這是我們需要進行的投資。這是公司的首要任務，但我認為我們能夠解決這個問題。再說一次，隨著時間的推移，我們不僅會看到合規性方面的好處，還會看到更好的客戶體驗和更高的效率。

If you step way back, I've never been more excited about Discover's business model and how it compares. I think you're seeing the strength of our deposit franchise at a time when many banks are being tested. We have the scale and resources to compete with anyone. We're making the investments to be at the leading edge around data and analytics. We're winning awards for our customer experience on not only just the card side, but also our deposit products. We have the relaunch of Cashback Debit.

如果你退一步看，我對 Discover 的商業模式及其比較感到前所未有的興奮。我認為，在許多銀行面臨考驗之際，您已經看到了我們存款業務的實力。我們擁有與任何人競爭的規模和資源。我們正在進行投資，以便在數據和分析方面處於領先地位。我們不僅在銀行卡方面，而且在我們的存款產品方面都因其客戶體驗而獲獎。我們重新推出了現金返還借記卡。

So in terms of the business model and the returns we can give to our owners, in my 25 years of Discover, I've never been more excited. To get to all of that, though, we need to get to where you need to be on the compliance standpoint. That's a critical part of operating a bank, a financial services organization. We are not where we need to be, and we are going to get there.

因此，就商業模式和我們可以為所有者提供的回報而言，在我從事 Discover 的 25 年中，我從未如此興奮過。然而，為了實現這一切，我們需要從合規的角度達到您需要的水平。這是運營銀行、金融服務組織的關鍵部分。我們還沒有到達我們需要到達的地方，但我們將會到達那裡。

Follow-up, just on compliance, having followed Discover for a very long time, coming out of the great financial crisis, there was a lot big investment in compliance across the industry, including at Discover, has it become more difficult? I mean, I know there's been a number -- quite a few consent orders put out by regulators. But has it become -- maybe give us some color on what you're investing in compliance today. Now if it's people or percentage of expenses versus historically? And has it become a lot more difficult?

後續，就合規而言，跟隨Discover很長時間了，從金融危機中走出來，整個行業在合規方面投入了很多，包括Discover，是不是變得更困難了？我的意思是，我知道監管機構已經發出了很多同意令。但它是否已經成為——也許可以讓我們了解一下您今天在合規性方面的投資。現在，與歷史相比，是人員還是費用百分比？是不是變得更加困難了？

Yes. It certainly is a challenging environment, but I'm not going to blame that, right? As I look back, I do believe we underinvested and that's something I take accountability for, but we are very focused on it now. And as John, I think highlighted, that investment takes many forms, right, from bringing in some highly talented folks within the compliance area, building out our monitoring and controls, investments on the technology side to standardize, simplify, automate manual processes.

是的。這當然是一個充滿挑戰的環境，但我不會責怪它，對嗎？當我回顧過去時，我確實相信我們投資不足，這是我要承擔責任的事情，但我們現在非常關注它。我認為，正如約翰所強調的那樣，投資有多種形式，從在合規領域引進一些高素質人才，建立我們的監控和控制，在技術方面進行投資，以標準化、簡化和自動化手動流程。

As you think about it, compliance and a lot of the focus, it's risk management, right? And traditionally, we have been very strong around credit risk management, around liquidity risk management but have not necessarily made the investments we needed, especially as the complexity of our business increased as we got into more new products, I think there was a gap there in terms of our capabilities, and that's what we're focused on now.

正如您所想，合規性和很多關注點都是風險管理，對嗎？傳統上，我們在信用風險管理、流動性風險管理方面一直非常強大，但不一定進行我們所需的投資，特別是隨著我們進入更多新產品，業務複雜性增加，我認為我們的能力存在差距，這就是我們現在關注的重點。

We'll take our next question from Arren Cyganovich with Citi.

我們將接受花旗銀行的 Arren Cyganovich 提出的下一個問題。

On the net charge-off peak that you highlighted for into second half of '24 and possibly into '25 , is that an expectation that it would go north of kind of your normal underwriting charge-off rate?

關於您強調的到 24 年下半年甚至可能到 25 年的淨沖銷峰值，是否預期它會超出您正常的承保沖銷率？

Thanks, Arren. No. I mean we gave the charge-off range. Now there's a numerator and denominator impact on that calculation, of course. But our underwriting is focused on prime revolver behavior and our targeted segments looks very, very consistent to where it's been historically.

謝謝，阿倫。不，我的意思是我們給出了沖銷範圍。當然，現在分子和分母對該計算有影響。但我們的承保重點是優質左輪手槍的行為，我們的目標細分市場看起來與歷史上的情況非常非常一致。

And our return expectations remain high, and we've been able to deliver on that. So in terms of, is it going to be north and where it was historically, we have seasoning of those new vintages, but our credit box has been relatively consistent. Our analytics too kind of target customers and understand kind of risk factors, I feel like has improved over the 4 years I've been here and certainly a longer journey than that. So the trajectory to me, looks very, very comfortable in terms of continuing to be able to deliver high returns and generate capital.

我們的回報預期仍然很高，而且我們已經能夠實現這一目標。因此，就是否會在北方以及歷史上的位置而言，我們對這些新年份進行了調味，但我們的信用箱相對一致。我們的分析也針對目標客戶並了解各種風險因素，我覺得在我在這裡的 4 年裡已經有所改善，當然還有比這更長的旅程。因此，在我看來，就繼續能夠提供高回報和產生資本而言，發展軌跡看起來非常非常舒適。

Okay. And then just to clarify on the expense commentary. It sounds like you're not planning to pull back on marketing opportunities as your compliance costs are rising. And then if you could just clarify the numbers that you gave earlier. Are those annual numbers? I think you said like $50 million up to $250 million and then $350 million and then down to $200 million. I was just a little confused on the trajectories there.

好的。然後只是澄清費用評論。聽起來您並不打算隨著合規成本的上升而減少營銷機會。然後您能否澄清一下您之前提供的數字。這些是年度數字嗎？我想你說的是 5000 萬美元到 2.5 億美元，然後是 3.5 億美元，然後是 2 億美元。我只是對那裡的軌蹟有點困惑。

Trajectory of the compliance management cost -- was that question, Arren, overall? Yes. So I'll start with marketing and I'll focus on the compliance second. We haven't made a decision to pull back on marketing. We still see opportunity to generate positive returns from the customers that we're targeting in that prime revolver segment. And we're also putting money towards helping people understand our deposit products and hopefully find that we're compelling there.

合規管理成本的軌跡——Arren，這個問題總體來說是嗎？是的。因此，我將從營銷開始，然後重點關注合規性。我們還沒有做出取消營銷的決定。我們仍然認為有機會從我們的主要左輪手槍細分市場的目標客戶那裡獲得正回報。我們還投入資金幫助人們了解我們的存款產品，並希望發現我們在這方面很有吸引力。

We also have the campaign on the Cashback Debit program slated for the second half of the year. So the marketing dollars, how we thought about them at the beginning of the year remains consistent with where we are today. And frankly, I think it would have been shortsighted to pull back in order to manage to a particular number given the high returns we're able to generate there.

我們還計劃在今年下半年開展現金返還借記計劃活動。因此，營銷資金以及我們在年初的想法與我們今天的情況保持一致。坦率地說，我認為考慮到我們能夠在那裡產生的高回報，為了達到特定的數字而退出是短視的。

In terms of the compliance cost, what I was referencing was 2019 to where we are in 2023. And so about a month ago, in a public forum, I said that, that increase from '19 to '23 was about $250 million. As we've looked at the work in front of us, we're dedicating an incremental probably $20 million to $30 million, maybe as much as $50 million over and above that here. So it could be the delta from '19, not $250 million, but maybe as much as $300 million. Year-over-year, so '22 to '23, we're up about $200 million in total compliance and related costs. Does that provide clarity?

就合規成本而言，我指的是 2019 年到 2023 年的情況。大約一個月前，在一個公共論壇上，我說過，從 19 年到 23 年的增加約為 2.5 億美元。當我們審視眼前的工作時，我們將投入大約 2000 萬至 3000 萬美元的增量資金，甚至可能在此基礎上投入 5000 萬美元。因此，這可能是 19 年以來的增量，不是 2.5 億美元，但可能高達 3 億美元。與去年同期相比，22 年至 23 年，我們的合規和相關成本總額增加了約 2 億美元。這是否提供了清晰度？

Yes. Yes, I got it now.

是的。是的，我現在明白了。

We'll take our next question from Dominick Gabriele with Oppenheimer.

我們將回答多米尼克·加布里埃爾和奧本海默提出的下一個問題。

Great. So when I look at your loan growth guidance, you talk about low- to mid-teens. And to me, that means 14% basically. And so if you think about 14% or that range that you're discussing, it would indicate the second half loan growth would be roughly 7%. And given the trajectory of loan growth in general, it would -- and spending being at 2.5% this quarter, moving to 1% in the most recent month, it would suggest the fourth quarter's loan growth would be probably low single digits or something along those lines to make that guidance range. And so I was just curious if that's the right math that you are thinking about or roughly, if we could talk about that, that would be great.

偉大的。因此，當我查看你們的貸款增長指導時，你們談論的是低至中青少年。對我來說，這基本上意味著 14%。因此，如果您考慮 14% 或您正在討論的範圍，則表明下半年貸款增長約為 7%。考慮到總體貸款增長軌跡，以及本季度支出為 2.5%，最近一個月為 1%，這表明第四季度的貸款增長可能會是較低的個位數或類似的水平，以達到該指導範圍。所以我很好奇這是否是您正在考慮的正確數學或粗略數學，如果我們可以討論這一點，那就太好了。

Yes. I learned a long time ago not to give quarterly guidance because I found that I was not as accurate as I would have liked and other people would have liked. So the range of kind of the double-digit growth that we talked about, you can take a look at the portfolio. We made some comments on what was driving it. So new accounts and certainly new account growth, '22 to '23 has slowed sales, while still very robust at an absolute level, have slowed into July. We're doing targeted promotional activities to drive high generating, high-returning accounts. And the comp in the fourth quarter of '22 versus prior quarters is certainly a tougher comp. So your math is certainly your math, and I don't want to get into any more specifics than what I just did.

是的。我很久以前就學會了不要提供季度指導，因為我發現我的指導並不像我希望的那樣準確，也沒有其他人希望的那麼準確。所以我們談到的兩位數增長的範圍，你可以看看投資組合。我們就其推動因素發表了一些評論。因此，22 年至 23 年的新客戶和新客戶增長雖然在絕對水平上仍然非常強勁，但銷售已經放緩，但到 7 月份已經放緩。我們正在開展有針對性的促銷活動，以吸引高收益、高回報的客戶。與前幾個季度相比，22 年第四季度的比賽無疑是一場更艱難的比賽。所以你的數學當然就是你的數學，我不想比我剛才所做的更具體。

No problem. And then there are some signs that the national unemployment rate could start to move higher if you look at some of the state data, if you saw seasoning and the unemployment rate rising at the same time, could it have a more additive effect for ultimately higher net charge-offs than otherwise to book without the seasoning effect? And maybe just to relate to that, your loan fee income has been quite robust in its growth and it beat our expectations by quite a lot this quarter? Is that kind of an indication of the seasoning effects that are going on with the late fees in that bucket?

沒問題。然後有一些跡象表明，如果你查看一些州數據，如果你看到調味和失業率同時上升，那麼與沒有調味效應的其他方式相比，它是否會對最終更高的淨沖銷產生更大的附加效應？也許與此相關的是，您的貸款費用收入增長相當強勁，本季度大大超出了我們的預期？這是否表明該桶中的滯納金正在產生調味效應？

Arren, the answer to both questions is yes. So the loan fee income, typically late fees and NSF fees, and in terms of employment levels, if unemployment was to increase, that would certainly impact net charge-offs. But I would say this, in the cohort of folks that we typically target, what we've seen is if they are impacted by a job situation, their time of recovery is pretty quick. So by recovery, I mean finding a new role. So the fact that this cohort of prime revolvers isn't in the upper tier of income levels allows them to have a greater opportunity to find jobs of equal pay -- equal or more pay in the current environment. So the employment -- early indications of employment or some challenges in some states, we don't see any sign of that translating into a credit situation for us.

阿倫，這兩個問題的答案都是肯定的。因此，貸款費用收入，通常是滯納金和國家科學基金會費用，就就業水平而言，如果失業率增加，肯定會影響淨沖銷。但我想說的是，在我們通常針對的人群中，我們看到的是，如果他們受到工作情況的影響，他們的恢復時間相當快。因此，我所說的恢復是指找到一個新的角色。因此，事實上，這群左輪手槍的主要成員並不處於收入水平的上層，這使得他們有更大的機會找到同工同酬的工作——在當前環境下同工同酬或更高。因此，就業——就業的早期跡像或某些州的一些挑戰，我們沒有看到任何跡象表明這會轉化為我們的信貸狀況。

Okay. Great. I'm going to sneak one more in here. Is the Discover spending growth has typically matched its loan growth trajectory over time given the stability of your business model. If we don't see a normalization of and meaningful fashion of payment rates, is there any reason that the spending growth and loan growth trajectories would be uncorrelated as they have been in the past?

好的。偉大的。我要再偷偷溜進去一趟。考慮到您的業務模式的穩定性，隨著時間的推移，發現支出增長通常與其貸款增長軌跡相匹配嗎？如果我們看不到支付率的正常化和有意義的方式，那麼支出增長和貸款增長軌跡是否會像過去那樣不相關？

Yes. So we'll look at kind of opportunities to drive loan growth. And part of that is the sales data, the spending data from consumers. And reflect that in our next set of guidance that we provide. But specifics in correlation in this form, I'm not going to get into.

是的。因此，我們將尋找推動貸款增長的機會。其中一部分是銷售數據、消費者的支出數據。並在我們提供的下一組指南中反映這一點。但對於這種形式的相關細節，我不打算深入討論。

We'll take our next question from Bill Ryan with Seaport Research Partners.

我們將回答 Seaport Research Partners 的 Bill Ryan 提出的下一個問題。

Thanks for working me in here at the end. Question on the personal loans business. Last quarter, you talked about that there was some marginal tightening that you did, but you had fairly robust loan growth this quarter. Could you talk about the market opportunity that you're seeing there? And also the mix of new versus existing customers. I believe the historical mix was about 50-50. Just curious if that's still the case.

謝謝你最後讓我在這里工作。關於個人貸款業務的問題。上個季度，您談到採取了一些邊際緊縮措施，但本季度的貸款增長相當強勁。您能談談您在那裡看到的市場機會嗎？還有新客戶與現有客戶的組合。我相信歷史組合大約是 50-50。只是好奇情況是否仍然如此。

Yes. So in terms of overall competition, I'd say there's been a little bit of a pullback on the supply side from the markets and others as they pulled out but there are a good number of competitors, a lot of them are much more broader spectrum than us in terms of how far down they go. I think what you're seeing is really strong consumer demand. As rates have gone up and our product is primarily used for debt consolidation, people are looking to consolidate and pay down their credit cards. And so we're seeing very strong demand that is giving us the ability to tighten credit and even at the margin, raise our prices and still see strong demand. So it's a product where underwriting and credit is everything.

是的。因此，就整體競爭而言，我想說，隨著市場和其他方面的退出，供應方面出現了一些回落，但有很多競爭對手，他們中的很多人的範圍比我們更廣泛，就他們的下降程度而言。我認為你看到的是非常強勁的消費者需求。由於利率上升，並且我們的產品主要用於債務合併，人們希望合併並償還信用卡。因此，我們看到非常強勁的需求，這使我們有能力收緊信貸，甚至在邊際上提高價格，但仍然看到強勁的需求。因此，這是一個承保和信用就是一切的產品。

The mix is largely new, but a good amount are cross-sold to our existing cardholder base. So it's customers where we also have experience with that.

這種組合很大程度上是新的，但有很大一部分是交叉銷售給我們現有的持卡人群體的。因此，我們在客戶方面也有這方面的經驗。

So I think we are going to conclude our call there. Thanks very much for joining us. If you have any follow-ups, please reach out to the IR team, and we wish you a very good day. Thanks very much.

所以我認為我們將在此結束我們的通話。非常感謝您加入我們。如果您有任何後續行動，請聯繫 IR 團隊，我們祝您度過愉快的一天。非常感謝。

This does conclude today's second quarter 2023 Discover Financial Services Earnings Conference Call. You may disconnect your line at this time, and have a wonderful day.

今天的 2023 年第二季度 Discover 金融服務收益電話會議到此結束。此時您可以斷開線路，度過美好的一天。