Discover Financial Services , the fourth-largest credit card network in the United States, posted an 11 percent decline in net income as provisions for loan losses grew amid a global credit crisis, and it said delinquencies would rise.
Discover said on Thursday that quarterly net income fell to $180 million, or 37 cents a share, from $202 million, or 42 cents a share, a year earlier.
Its provision for loan losses more than doubled to $364.8 million from $145.8 million a year ago as net charge-offs rose.
Discover's net principal charge-off rate, an annualized measure of bad debt write-offs, climbed to 4.76 percent in its fiscal third quarter from 3.23 percent a year earlier. Its 30-day delinquency rate rose to 3.58 percent from 2.81 percent a year ago.
Chief Executive Officer David Nelms said in an interview the company expected delinquency rates and debt write-offs to rise in 2009. He said Discover had tightened its credit standards and closed inactive accounts to reduce loan losses.
