Shares in the lender fell after it reported lower third-quarter profits, said nonperforming assets rose and cautioned that it had lost multifamily loan deals to competitors offering easier terms.
The nation's largest private student lender plans to curtail its use of forbearance, a move that could well save some borrowers money but could also result in more defaults.
The credit card issuer, which recorded an 11% decline in net income last quarter, took one-time charges in connection with a U.K. sales scandal, the start of a new partnership with Walmart and a recent data breach.
It has already been modifying more problem loans and investing in efforts to recover charged-off loans, and now the credit card lender is ready to tighten underwriting in case the economy weakens.
The company says the upgrade will support future digital investments. It also said Tuesday that third-quarter profits climbed 8% but reported a sharp increase in criticized business loans.
While demand is strong and loan performance generally remains solid, the prevalence of longer loan terms has sparked concern that losses will eventually spike.
Its quarterly results show lower rates and emerging credit risks can be overcome. Whether most banks have all the same levers to pull is another matter.
