RIVERWOODS, Ill. ( TheStreet) -- Discover Financial Services ( DFS) appears to have more than enough capital to pay back the $1.2 billion in TARP funding it received from the U.S. Treasury, but analysts who follow the credit card issuer see no urgent need for it to do so.

"They've been very consistent in saying 'This is very attractive capital and we're not really in any rush to automatically just pay it back,'" says Henry Coffey, analyst with Sterne Agee.

Coffey estimated Discover's Tier One common equity ratio at 12% in a report published Monday, significantly higher than that of JPMorgan Chase ( JPM), which had just a 7.7% Tier One common equity ratio at the end of the third quarter, after it paid back the CPP funds it received. Bank of America ( BAC), which just issued more than $19 billion in equity to pay back TARP, has a roughly 8.25% Tier One common ratio.

Coffey upgraded Discover to a buy Monday, arguing loan losses will not be as bad as expected. His report also states Discover has "met all the requirements" for paying back the CPP funds under the TARP. His upgrade, accompanied by one from Bank of America Merrill Lynch, drove Discover's stock up 1.52% Monday even as all the major equity indexes fell.

For its part, Discover has little to say of the subject of TARP.

"Senior management will work with our board of directors to determine the right time to pay back TARP funds. Of course, as you know, repaying TARP funds is also subject to receiving prior regulatory approval," said a company spokeswoman via email.

JPMorgan and Goldman Sachs ( GS) paid back their CPP funds at the first opportunity, and Bank of America's stock saw a big rally last week on news it would repay the CPP even as it issued more than $19 billion worth of new shares to accomplish the feat.

Citigroup ( C)'s relative slowness in paying back TARP has exposed it to criticism, though there is a healthy debate on the subject.

Discover, however, is not the political lightning rod the nation's largest banks have become, and so may have more in common with smaller banks, who say they are content to hang on to the Treasury's investment, both to guard against further weakness in the economy and for potential growth opportunities.

But credit card lending is not a very exciting growth business, due to punitive new legislation, according to Sterne Agee's Coffey.

"Congress has so badly scrambled the equation that you're not seeing a lot of expansion," he says.

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