Discover Financial Profit Dives 68% as Compliance Costs Bite (2)

Discover Financial Services, the lender that agreed to be acquired by Capital One Financial Corp. in the year’s biggest announced deal, posted a sharp drop in first-quarter profit as it worked to address compliance and risk-management deficiencies.

Net income plunged 68% to $308 million, or $1.10 a share, for the three months through March, Riverwoods, Illinois-based Discover said Wednesday in a statement. That missed the $2.96 average estimate of analysts in a Bloomberg survey.

A Discover credit card arranged in Rhinebeck, New York, on Feb. 20.

Photographer: Angus Mordant/Bloomberg

Capital One Chief Executive Officer Richard Fairbank predicted in February, shortly after announcing the $35 billion deal to create the largest US credit-card ...