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 are unclear, a deal could be announced as soon 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 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 said.
The deal could come weeks after TD Bank Group veteran Michael Rhodes took over as Discover Financial's new CEO following the exit of Roger Hochschild in August.
Discover last year 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.
Discover said in October that it agreed to improve its consumer compliance and related corporate governance as part of a consent order with the Federal Deposit Insurance Corp (FDIC).
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.
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