September 27, 2012 / 12:40 PM / in 5 years

Discover Financial 3rd-qtr profit falls

Sept 27 (Reuters) - Credit card company Discover Financial Services’ third-quarter profit fell marginally as it increased legal expenses and set aside more money to cover bad debts.

Profit fell to $627 million, or $1.21 per share, compared with $649 million, or $1.18 per share, a year earlier.

Provision for loan losses rose 26 percent to $126 million.

Discover’s large loan portfolio is spurring the increase in provisions even as its bad debts have fallen to historical lows.

Only 1.79 percent of its loans were delinquent at August end, down marginally from 1.83 percent at the end of July.

Earlier this month, Discover said its banking unit would pay about $200 million to cardholders who bought certain credit-protection products over the phone, as part of an enforcement action by the Consumer Financial Protection Bureau.

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