July 17 (Reuters) - Discover Financial Services ( DFS )

on Wednesday reported a 70% rise in second-quarter profit, as a

high-rate environment helped the U.S. credit issuer earn more in

interest income.

Credit card-focused lenders have outperformed the broader

industry this year, benefiting from gains in interest income.

Companies like Discover get shielded from market volatility in

mortgages as customers do pay higher amount of interest amount

on their credit cards.

Riverwoods, Illinois-based Discover recorded net interest

income of $3.52 billion in the second quarter, nearly 11% higher

than the same quarter last year.

Discover's provision for credit losses fell to $739 million

in the quarter ended June 30 from about $1.31 billion in the

year-ago period.

Discover's net income jumped to $1.52 billion, or $6.06 per

share, from $895 million, or $3.54 per share.

Earlier in the day, Discover said it will sell a portfolio

of student loans to buyout giants Carlyle and KKR

for up to $10.8 billion.

Separately, Capital One said on Wednesday it would commit

$265 billion over five years to lending, philanthropy and

investment if its takeover of Discover goes through.

Its $35 billion Discover deal will create the biggest U.S.

credit card issuer by balances and the sixth-largest bank by

assets. It will also give Capital One control of Discover's card

payment network, the fourth major payment network operator after

Visa, Mastercard ( MA ) and American Express ( AXP ).