Capital One Profit Drops on Higher Provision for Credit Losses
April 26 2016 - 4:52PM
Dow Jones News
By Lauren Pollock
Capital One Financial Corp. said its profit fell a
bigger-than-expected 12% in the first quarter, hurt by a higher
provision for credit losses and an increase in expenses.
Shares declined 2.6% after hours.
As one of the country's largest credit-card lenders, Capital
One's results are often considered a gauge of consumer sentiment.
The company also offers traditional bank accounts, mortgages, auto
loans and commercial loans.
The bank's provision for credit losses rose to $1.53 billion
from $935 million a year earlier and $1.38 billion in the previous
quarter.
Analysts, ahead of the report, warned about potentially higher
credit-loss provisions at Capital One. Oppenheimer, for one, cited
the company's subprime-borrower exposure in downgrading the firm's
stock to underperform earlier this month.
In all, Capital One reported a profit of $1.01 billion, or $1.84
a share in the quarter, down from $1.15 billion, or $2 a share, in
the same period a year earlier. Revenue improved to $6.22 billion
from $5.65 billion, driven by increases in net interest and
non-interest income.
Analysts polled by Thomson Reuters expected a per-share profit
of $1.91 on revenue of $6.16 billion.
Non-interest expenses increased to $3.22 billion from $3.05
billion a year earlier.
Write to Lauren Pollock at lauren.pollock@wsj.com
(END) Dow Jones Newswires
April 26, 2016 16:37 ET (20:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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