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Morgan Stanley's board has approved the pursuit of a spin-off of the company's Discover credit card business.

It is a little surprising that CEO Philip Purcell wants to spin-off Discover since recently he said that it was a key component of the company.

An article from The Street says:

"The spinoff, which was approved by directors, will put a new, publicly traded company in shareholders' hands at a time when several big Morgan Stanley owners are calling for the ouster of CEO Philip Purcell. Purcell is the architect of Dean Witter Discover unit and used it to merge with Morgan Stanley eight years ago.

Discover claims 50 million credit card customers, $48 billion in managed loans and could be poised to expand its reach in the wake of a Supreme Court decision last year that faulted business practices at Visa and Master Card."

"The rationale for this action is twofold: One, to maximize the shareholder value in the Discover Card division, and allow management of that business to capitalize on the momentum, both in performance, and in the opportunities opening up in the payments market, and two, to further intensify our focus on the high-return growth opportunities within our integrated securities businesses," said Purcell.

Discover has been estimated to be worth nearly $9.6 billion.

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