By Tess Stynes
Capital One Financial Corp. said its first-quarter earnings rose
9.3% as a decline in the amount set aside for potential loan losses
helped offset a drop in revenue.
Capital One reported a profit of $1.15 billion, up from $1.1
billion a year earlier. On a per-share basis, which reflects
preferred-dividend impacts, earnings rose to $1.96 from $1.77.
Net revenue decreased 3% to $5.37 Billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.69 and revenue of $5.44 billion.
The company's credit-loss provision was $735 million, compared
with $885 million a year earlier and $957 million in the fourth
quarter.
Operating expenses edged down 0.4%.
Capital One has traditionally generated more than half of its
revenue from credit cards, though in recent years the company has
worked to transform itself into a full-scale bank through a series
of acquisitions.
Like other credit card lenders, Capital One has had to contend
with cautious consumers, who have reined in their use of revolving
credit since the financial crisis. The McLean, Va., bank's loan
growth has been outpaced by competitors American Express Co. and
Discover Financial Services in recent years.
To expand its revenue sources, Capital One acquired the U.S.
credit-card business of HSBC Holdings PLC in 2012, which made it
the third-largest U.S. issuer of private-label cards, which are
issued on behalf of retailers and other partners. The deal followed
Capital One's acquisition earlier that year of ING Groep NV's U.S.
online-banking business.
--Andrew R. Johnson contributed to this article.
Write to Tess Stynes at tess.stynes@wsj.com
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