June 20 (Reuters) - Private equity firms Carlyle Group

Inc ( CG ) and KKR are the top bidders for U.S. credit

card issuer Discover Financial's $10 billion U.S.

student loan portfolio, the Financial Times reported on

Thursday.

The two are "working together" for the bid as private

investment firms seek to expand their appetite for credit, the

newspaper reported.

The report did not specify in what capacity the two firms

were working together.

Other PE firms such as Ares, Blackstone, Brookfield,

Fortress and Oaktree had also studied bids for the loan

portfolio, FT said.

Discover Financial, Carlyle, KKR, Ares, Blackstone,

Brookfield, Fortress and Oaktree did not immediately respond to

Reuters requests for comment.

FT added that the deal is likely to conclude later this

month or in early July.

Last November, Discover Financial said it was exploring the

sale of its student loan portfolio, stating that a potential

sale would see the servicing of these loans transferred to a

third party.

Earlier this year, Warren Buffett-backed U.S. consumer bank

Capital One said it would acquire Discover Financial for $35.3

billion in an all-stock deal.

The deal comes as regulators ramp up scrutiny of bank

mergers under U.S. President Biden's administration, and as

debate over the risks and benefits of bank mergers intensify

after JPMorgan and New York Community Bank

NYCB.N were allowed to snap up failed bank assets last year.