Capital One Q4 Profit Surges 60% on Interest Income Growth
Capital One Financial (COF) reported a significant 60% increase in fourth-quarter profit, driven by higher interest income. The consumer lender benefited from resilient consumer spending amid hopes of a soft economic landing and declining interest rates.
Credit card operations accounted for nearly half of Capital One's loan portfolio, where they rank as one of the largest issuers of Visa and Mastercard cards in the U.S. by balances. The company's net interest income, the difference between interest earned on loans and paid on deposits, grew by almost 8% to $8.1 billion in Q4.
Provisions for credit losses decreased to $2.64 billion from $2.86 billion in the same period last year. CEO Richard Fairbank highlighted "steady top-line growth in our domestic card business, strong originations, and stable credit results."
Non-interest income, including interchange income and customer fees, increased by 5% to $2.09 billion. Net income available to common stockholders rose to $1.02 billion (or $2.67 per share) in the three months ended December 31, up from $639 million (or $1.67 per share) a year earlier.
Capital One's shares rose 36% in 2024. However, the company came under fire last week when the U.S. Consumer Financial Protection Bureau accused it of illegally withholding interest payments from its high-yield savings account customers. Capital One has refuted these claims and plans to defend its position in court.