Providian Shares Rise 7% on Loan Purchase

Shares of Providian Financial Corp. rose 7% after it bought a high-risk credit card loan portfolio from First Union Corp. San Francisco-based Providian, a consumer finance company that specializes in credit cards, rose $4.13 to close at $61.56 on the NYSE. Earlier, the stock rose to $63.75. Providian agreed to buy $1.1 billion of poor-performing credit card loans from Charlotte, N.C.-based First Union, increasing its managed assets by about 10%. The purchase boosts Providian’s presence in credit cards, said Jennifer Scutti, an analyst at Prudential Securities Inc. “This makes them a major player in the higher-risk credit card market, which is what they’re good at,” Scutti said. Card companies collect higher-than-average fees for managing risky credit card loans.