Capital One Reports Strong Q4 Earnings Driven by Margin Expansion and Credit Card Growth
Capital One Financial Corp. (COF) released its fourth-quarter financial results, showing a significant increase in net income due to wider net interest margins and growth in credit card loans.
* Net income: $1.1 billion, a 55% increase from $714 million in Q4 2021.
* Earnings per share: $3.09, exceeding analyst estimates of $2.78.
* Net interest margin: 7.03%, an increase from 6.73% in Q4 2021.
Additionally, Capital One reported:
* Revenue: $10.2 billion, a 2% increase year-over-year.
* Credit loss provision: $2.6 billion, lower than market expectations.
* Credit card loans: $162.5 billion, a 4% increase.
* Auto loans: $76.8 billion, a 2% increase.
In a statement, CEO Richard Fairbank attributed the strong performance to "steady top-line growth in our domestic card business, strong originations, and a return to loan growth in our auto business."
Despite the positive earnings report, Capital One's stock remained relatively flat in extended trading. The company has faced challenges recently, including an online-banking disruption and a lawsuit by the US Consumer Financial Protection Bureau over savings account rates.
Capital One is moving forward with its $35 billion acquisition of Discover Financial Services, with shareholder votes scheduled for February 18th. The deal, pending regulatory approval, would create the largest U.S. credit card issuer by loan volume.