Barclays Capital Financial Services Conference

Roy Guthrie

Executive Vice President,

Chief Financial Officer

May 6, 2009

Exhibit 99.1

Notice

The following slides are part of a presentation by Discover Financial Services (the "Company") and are intended to be

viewed as part of that presentation. No representation is made that the information in these slides is complete.

The information provided herein may include certain non-GAAP financial measures. The reconciliations of such

measures to the comparable GAAP figures are included in the Company’s Quarterly Report on Form 10-Q for the

quarter ended February 28, 2009, and the Company’s Annual Report on Form 10-K for the year ended November 30,

2008, which are on file with the SEC and available on the Company’s website at www.discoverfinancial.com.

The presentation contains forward-looking statements. You are cautioned not to place undue reliance on forward-

looking statements, which speak only as of the date on which they are made, which reflect management’s estimates,

projections, expectations or beliefs at that time and which are subject to risks and uncertainties that may cause actual

results to differ materially. For a discussion of certain risks and uncertainties that may affect the future results of the

Company, please see "Special Note Regarding Forward-Looking Statements," "Risk Factors," "Business –

Competition," "Business –

Supervision and Regulation" and "Management’s Discussion and Analysis of Financial

Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended November 30,

2008, and “Risk Factors”

and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations”

in the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2009, which are on

file with the SEC.

Certain historical financial information about the Company that we have included in this presentation has been derived

from Morgan Stanley’s consolidated financial statements and does not necessarily reflect what our financial condition,

results of operations or cash flows would have been had we operated as a separate, stand-alone company during the

periods presented.

We

own

or

have

rights

to

use

the

trademarks,

trade

names

and

service

marks

that

we

use

in

conjunction

with

the

operation

of

our

business,

including,

but

not

limited

to:

Discover®,

PULSE®,

Cashback

Bonus®,

Discover®

Network

and Diners Club International®.  All other trademarks, trade names and service marks included in this presentation are

the property of their respective owners.

2

3

Company

Overview

(1)

•

Leading cash rewards program

•

6

th

largest U.S. issuer

•

Over $49Bn in managed receivables

•

$109Bn volume

•

4,500+ issuers

•

$28Bn deposit base

•

$1.8Bn personal and student loans

•

$100Bn volume

•

30+ issuers

Note(s):

1.

Balances as of February 28, 2009; volume based on the trailing four quarters ending 1Q09

2.

Includes volume prior to acquisition

•

$27Bn volume

(2)

•

49 licensees

•

185 countries/territories

4

Broaden consumer relationships

Build global network

Further strengthen foundation

Acceptance

DFS

Volume

•

Discover Card

•

Third-Party

•

U.S. acceptance

•

Diners Club

•

PULSE

Discover’s Strategy

DFS

Financial wallet share

Card wallet share

•

Brand preference

•

Products/features

•

Customer

experience

•

Prime lending

•

Deposits

People/

culture

Expense

base

Funding/

capital

5

Manage conservatively in a challenging environment

•

Superior credit performance vs. competitors

•

Conservative loan growth

•

Increase net interest margin and revenues

•

Reduce expenses

•

Focus on capital/liquidity/funding

Build for the future

•

Continue to grow direct-to-consumer deposit business

•

Leverage Discover brand and leading Rewards program

•

Increase acceptance to drive higher sales and card utility

•

Grow and integrate Diners Club/PULSE/Discover networks

•

Remain conservative on liquidity and capital

Performance Priorities

6

Discover Card:  Controlled Growth

and Differentiated Credit Quality

Managed Card Receivables Growth 

2005-2008 CAGR

Managed Net Charge-off Rate –

1Q09

3.0%

3.3%

6.2%

9.9%

10.2%

1.9%

DFS

COF

BAC

C

AXP

JPM

6.6%

7.7%

8.4%

8.5%

8.9%

9.2%

DFS

JPM

COF

AXP

C

BAC

Note(s)

1.

Quarter ending February 28, 2009; U.S. credit card receivables

2.

Card Services segment

3.

U.S. Card

4.

Citi Branded Cards

Note(s)

1.

Based on calendar year

2.

Global Cards segment

3.

Credit Cards segment (includes U.S. and international consumer cards, excludes

business cards); pro forma of BAC and MBNA (MBNA acquired in 1Q06)

4.

Global Consumer Cards segment

5.

Worldwide

Lending

6.

Card Services; includes WaMu portfolio acquisition (4.4% growth excluding WaMu)

(2)

(6)

(3)

(4)

(5)

(1)

(3)

(3)

(3)

(4)

(2)

(1)

7

Customer Profile

Demographic Profile

Source

2008 TNS Card Research

73%

88%

44%

43%

68%

82%

33%

37%

Married

Homeowner

College Graduate

Income > $75K

Discover

Other Issuers

Rewards

•

Highest levels of

customer satisfaction

•

Highest stated intent to

keep primary

Customer

Satisfaction

Loyalty

•

Leader in cash rewards

•

Highest household

ownership of cash

rewards cards

•

Longest cardholder

retention

•

Among highest to

recommend

Source

TNS State of Card Market Report, 2008

8

44%

22%

16%

14%

7%

6%

DFS

JPM

C

AXP

BAC

COF

6%

4%

4%

4%

82%

Cash

Points

Gas

Airline

Miles

Other

Cash Rewards

Reward Preference

(1)

(%)

Cash Rewards Market Share

(2)

Note(s)

1.

Percent

that

chose

reward

type

“I

like

a

lot”

over

all

other

types

(ties

included)

2.

Household ownership of cash rewards cards; percentages add to more than 100% due to household use of multiple brands

Source

Millward Brown 2008 A&U

Source

2008 TNS Consumer Card Research

9

DFS Portfolio Positioning

79%

73%

60%

58%

46%

55%

DFS

C

BAC

AXP

JPM

COF

10%

13%

12%

15%

14%

17%

6%

6%

7%

8%

9%

16%

18%

19%

22%

26%

6%

22%

DFS

JPM

COF

C

BAC

AXP

Florida

California

Geography

(1)

Tenure

(1)

Source:

1.

Master Trust Receivables; Trust Data as of: Discover: May-08, Citi: Mar-08, BoA: Mar–08, AMEX: Aug-08, Chase: Sep-08, Capital One: Mar-08

2.

Internal Data

Rent,

Other

20%

Own

Outright

26%

Mortgages

54%

ARM Non-

Prime

4%

ARM Prime

14%

Fixed Non-

Prime

7%

Fixed

Prime

75%

Mortgage

(2)

Homeownership

(2)

10

0%

50%

100%

150%

200%

Unemployment and Underemployment Rates

Current Environment

Source

Bureau of Labor Statistics; recessions shaded

Source 

The Conference Board

Consumer Confidence

0%

4%

8%

12%

16%

Unemployment

Unemployed plus Underemployed (Persons Working Part-Time due to Economic Reasons)

11

Economic Stress

Unemployment Rate –

By State

March 2008

March 2009

4% to 5%

5% to 6%

6% to 7%

7% to 9%

9% to 11%

>11%

Unemployment Rate

Source 

Bureau of Labor Statistics

12

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

1Q04

1Q05

1Q06

1Q07

1Q08

1Q09

DFS (FY)

Industry

Strong Relative Credit Performance

Source

Company Filings

Managed Net Charge-off Rate

Managed Net

Charge-off Rate –

YOY %

Note(s)

1.

Includes most relevant reporting segments of JPM, C, BAC, COF and AXP

-60%

-40%

-20%

0%

20%

40%

60%

80%

1Q04

1Q05

1Q06

1Q07

1Q08

1Q09

DFS (FY)

Industry

Source

Company Filings

(1)

(1)

13

Loan Loss Provisions

Total Provision Change (MM)

113

165

$582

$754

$1,106

$1,334

829

595

641

691

300

339

(14)

115

2Q08

3Q08

4Q08

1Q09

Net Charge-offs

Reserve Build

ABS Maturities

Loss Guidance Update

•

2Q09 managed charge-off rate

estimated to be approximately 8%

•

Will continue to build reserves

reflecting credit conditions

(1)

Note(s)

1.

ABS maturities funded on-balance sheet

14

2005

2006

2007

2008

$143

$163

$186

$221

10.2%

1.7%

2.4%

NM

2005

2006

2007

2008

Network Volumes and Profit Contribution

CAGR = 16%

Note(s)

1.

Not meaningful; Discover Third-Party Payments had a loss in FY2005

Network Volumes (Bn)

Third-Party Payments PBT

as % of DFS Total

(1)

15

Network Interoperability Targets

Global ATM

acceptance for

Diners Club cards

2009

Diners Club cards accepted

at Discover Network

locations in North America

2010

2011

Discover Network

cards live in

international markets

16

Funding and Liquidity

Funding Mix (%)

Contingent Liquidity (Bn)

5.1

8.3

2.4

1.5

2.5

2.4

4.5

$16.7

$10.0

  June 07 Spin-off

1Q09

Fed Discount Window

Committed Credit

ABCP Open Lines

Liquidity Reserve

54%

41%

35%

39%

5%

13%

7%

6%

  June 07 Spin-off

1Q09

Other

Direct-to-Consumer Deposits

Brokered Deposits

ABS

(1)

Note(s)

1.

$750MM will expire in each of the second and third quarters of 2009

17

Deposits

Period End Balances (Bn)

Note(s)

1.

Deposits sourced through broker dealers and sweeps programs

2.

Includes deposits originated through affinity relationships

Brokered and Direct-to-Consumer

(2)

(1)

20.9

22.1

22.3

21.3

3.8

4.8

6.1

7.0

$24.6

$26.9

$28.5

$28.3

2Q08

3Q08

4Q08

1Q09

Total Brokered Deposits

Total

Direct-to-Consumer

18

8.8%

6.4%

4.8%

DFS

AXP

COF

Capital Ratios –

1Q09

Tangible Common Equity

to Tangible Managed Assets

Tier 1 Capital Ratio

11.4%

14.8%

17.1%

DFS

AXP

COF

Note(s)

1.

Derived from company reports

(1)

Note(s)

1.

Discover pro forma at 2/28/09 includes TARP CPP funds of $1.2Bn received in 2Q09

(1)

19

Actions to further strengthen our balance sheet

•

Reserve additions

•

Dividend reduced to $.02 per share

•

Capital Purchase Program proceeds in 2Q09

•

Antitrust litigation settlement proceeds

Build for the future

•

Continue to grow direct-to-consumer deposit business

•

Leverage Discover brand and leading Rewards program

•

Increase acceptance to drive higher sales and card utility

•

Grow and integrate Diners Club/PULSE/Discover networks

•

Remain conservative on liquidity and capital

2009 Outlook

Barclays Capital Financial Services Conference

Roy Guthrie

Executive Vice President,

Chief Financial Officer

May 6, 2009