(Updates stock price, and adds analysts earnings estimates and
stock recommendation.)
DOW JONES NEWSWIRES
Capital One Financial Corp. (COF) reported a continued increase
in delinquencies for U.S. credit-card customers in August, but
charge-off levels eased from July.
The credit-card lender turned bank in recent months has been
struggling with increasing credit concerns as the recession
threatens its balance sheet. The delinquencies give a glimpse of
issuers' potential losses and how much they may need to set aside
in reserves.
Following the report on August delinquencies, analysts at Calyon
Securities raised their estimate for 2009 earnings at Capital One
to 73 cents a share, and also raised estimates for earnings in 2010
and 2011.
But the analysts downgraded the shares to underperform from
outperform after a sharp rise in the stock price and because "we
believe valuations could be peaking for lenders when taking into
account the considerable uncertainty that remains."
Shares of Capital One were down 4.4% at $36.62 in late morning
trading.
Last week, Citigroup Inc. (C) analysts said Capital One likely
has seen the worst of credit-card charge-offs - loans the lender
doesn't think it can collect but aren't in default yet.
Charge-offs declined to 9.32% in August from 9.83% in July in
its U.S. credit-card business and fell to 8.6% from 9.76%
internationally. However, auto-finance charge-offs rose to 4.31%
from 4.26%, the company said in a filing with the Securities and
Exchange Commission.
In its U.S. credit-card business, 30-day delinquencies rose to
5.09% last month from 4.83% in July, while auto deals were flat at
9.42% and international delinquencies eased to 6.67% from
6.68%.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com