Jan 17 (Reuters) - Discover Financial Services reported a 62% fall in fourth-quarter profit on Wednesday, as the lender set aside more rainy-day funds to cover loans that could sour in a tough economy, sending its shares down 6.7% after the bell.

U.S. banks have increased their provisions for losses from bad loans as higher interest rates heighten the risk of default on mortgages and credit card debt by consumers.

Discover provisioned $1.91 billion for credit losses in the quarter, higher than the $883 million a year prior.

However, the company posted a 13% growth in its quarterly net interest income, the difference between what it makes on loans and pays out on deposits.

Its total operating expenses rose 19% to $1.78 billion in the fourth quarter ended Dec. 31.

Discover's net income fell to $388 million, or $1.54 per share, from $1.03 billion, or $3.74 per share, a year earlier.

The digital bank said in late 2023 that it was exploring the sale of its student loan business, which would allow it to focus on transactional banking.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shweta Agarwal)