Capital One, an online consumer bank and credit card issuer backed by investor Warren Buffett, is considering a potential acquisition of credit card lender Discover Financial Services, a person familiar with the matter said.
While the terms could not be learned, a deal could be announced as early as Tuesday, according to the source.
Discover Financial has a market capitalization of $27.6 billion, while Capital One is valued at $52.2 billion, according to LSEG data.
Bloomberg News had first reported on the deal. Discover and Capital One did not immediately respond to requests for comment.
Capital One has been working with advisers to “study a deal” for Discover, Bloomberg’s report had said.
The deal comes weeks after TD Bank Group veteran Michael Rhodes took over as Discover Financial’s new CEO following the exit of Roger Hochschild in August.
In late 2023, Discover said it was exploring the sale of its student loan business and would stop accepting new student loan applications in February.
The company in July disclosed a regulatory review over some incorrectly classified credit card accounts from mid-2007.
In October, Discover said it agreed to improve its consumer compliance and related corporate governance as part of a consent order with the Federal Deposit Insurance Corp.
In January, Discover and Capital One reported 62% and 43% falls in fourth-quarter profit, respectively, as banks increased provisions for losses from bad loans as rising interest rates raised the risk of consumer defaults on credit card debt and mortgages.
This story originally appeared on NYPost
