MBNA Corp. (KRB), the largest independent U.S. credit card company, on Thursday reported higher quarterly earnings, helped by better credit quality and growth in fee income.

The Wilmington, Dela.-based company posted earnings of $660.3 million, or 51 cents a share, for the second quarter compared with $543.3 million, or 42 cents a share, a year earlier.

"It was not MBNA's strongest quarter, but we expect earnings to improve in the later half of the year," said Michael Cohen, an analyst aing to Reuters Estimates.

MBNA Corp. said it added 2.5 million new cardholder accounts in the second quarter.

Loan receivables as of June 30 were $30.5 billion, up $1.2 billion from a year earlier. Total  managed loans at June 30 were $118.2 billion, up $7.7 billion.

"The primary source of the better-than-expected earnings was lower provision expense," Cohen said in a note to investors on Thursday. "Provision expense was 93 percent of actual net credit losses, which represented an $88 million pretax difference or a 5 cents benefit to earnings per share."

Finance companies such as MBNA set aside money in case of losses. In this case, the firm's results benefited from fewer losses on credit cards.

Based on improved asset quality trends, the company's provision for possible credit losses in the second quarter of 2004 was $94 million lower than a year earlier.

MBNA shares rose 8 cents or 0.3 percent to $24.56 on the New York Stock Exchange on Thursday.