Discover Financial Services has agreed to purchase $2.5 billion of private student loans from Citigroup, as the lender continues diversifying beyond its main credit card business.

The deal comes several months after Discover bought Citigroup’s majority-owned student lending operations.

The Riverwoods, Ill., credit card issuer said in a Thursday filing that it will fund the purchase through existing liquidity and current funding channels. The transaction is expected to generate 7 cents per share in 2012 in earnings.

The portfolio is about 80% school-certified loans issued to four-year college or graduate student borrowers. The remainder of the portfolio is primarily private consolidation and professional study loans. The average FICO score on the portfolio is 740 with approximately 80% of the loans in active repayment and nearly 70% cosigned.

Discover said in the filing that the purchase price equals 99% of the outstanding principal and accrued interest balance of the loans, excluding certain charged-off loans. The deal is expected to close Sept. 30.

In recent years Discover has been looking to expand beyond credit cards into other banking operations, including online deposit-taking, student lending and mortgages. In January, Discover completed its $600-million acquisition of Student Loan Corp., which was majority-owned by Citigroup. That deal included $4.2 billion in private student loans and other assets. Discover also acquired $3.4 billion of asset-backed securitization funding and other liabilities.

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