Rising loan losses at Discover Financial Services contributed to a 6% decline in profits during the third quarter.
The Riverwoods, Ill.-based credit card issuer reported net income of $602 million, down from $639 million during the third quarter of 2016.
Discover’s provision for loan losses grew by 51% to $674 million, as bad loans increased in each of the company’s major lending segments.
In the credit card business, which accounts for a majority of Discover’s total loans, the net chargeoff rate climbed to 2.80%, up from 2.17% during the same period a year earlier. The percentage of credit card loans that were at least 30 days past due rose to 2.14%, up from 1.87% in the third quarter of 2016.
In Discover’s student loan business, the net chargeoff rate during the third quarter was 1.14%, up from 0.70% a year earlier.
And in the firm’s personal loan business, the net chargeoff rate climbed to 3.19% from 2.63% in the same period last year.
Total loans at Discover climbed by 9% to $80.4 billion, and credit card loans rose by the same percentage.
“We achieved strong growth across our businesses while maintaining our historical emphasis on disciplined underwriting and profitability,” Discover CEO David Nelms said in a press release.
Discover’s operating expenses rose by 6% during the third quarter to $948 million, partially as a result of investments the company is making in technology. Those investments are intended to enhance customer experiences, drive future growth, and improve the firm’s efficiency.