Capital One Financial (NYSE:COF) is reportedly considering the acquisition of credit card company Discover Financial Services (NYSE:DFS), according to Bloomberg News. The potential deal, if materialized, could become one of the largest deals of the year and the largest in Capital One’s history. However, there is no guarantee that the merger talks between the two companies will lead to a final agreement.

The news of the potential merger comes at a time when the U.S. stock market was closed for President’s Day. In January, Discover reported a significant drop of 62% in net income for the fourth quarter, leading to a 2% year-to-date decrease in its shares. The company’s provision for credit losses also rose by $1.0 billion compared to the previous year, reaching $1.9 billion, driven by a higher reserve build and an increase in net charge-offs.

As of now, neither Capital One nor Discover has responded to Bloomberg’s requests for comment regarding the merger talks.

Market analysts and investors are closely monitoring this potential deal, considering the impact it could have on both companies and the broader financial sector. The discussions between Capital One and Discover Financial are ongoing, and the financial community awaits further developments in the coming days.

Meanwhile, the news has sparked discussions among market observers and participants. Some have expressed skepticism about the feasibility of a subprime lender like Capital One acquiring a premium credit lender like Discover, citing differences in their business models and market positioning. Others have pointed out that Capital One, being twice as big in sales and net income compared to Discover, may have the capacity to pursue such a merger.

It is essential to note that the potential merger between Capital One and Discover Financial Services could have far-reaching implications for the financial industry, reshaping the competitive landscape and influencing market dynamics. As the discussions progress, stakeholders and industry experts will be closely following the developments to assess the potential outcomes and implications of this significant corporate move.