Amid the spate of financial institutions reporting results that show increased traction in consumer spending — especially across credit cards — add Capital One Financial to the list.
In results posted Tuesday (Jan. 21), the company reported adjusted earnings and revenues that topped expectations on the heels of double-digit gains in purchase volume across domestic cards.
In terms of headline numbers, adjusted earnings were $2.49 a share, better than the $2.37 per share expected by the Street. Total net revenues, up 5.9 percent year on year, stood at $7.4 billion, a bit better than the $7.3 billion that had been expected.
As has been seen in past quarters, the domestic card business was strong, where at the end of the quarter, domestic card average loans were up 9 percent, to $113 billion. Consumer banking average loans were up 2 percent to $62.6 billion. Auto loans, on average, were also up 2 percent to $59.9 billion.
In terms of further granular detail on the card business, Capital One said in supplemental materials that accompanied earnings that purchase volume was up 11 percent to $107 billion.
The net charge-off rate was down 32 basis points to 4.32 percent.
Net interchange revenues were up 9.2 percent in the period, management said on the call.
With some illumination on credit profile, the FICO scores of 660 and above as a percentage of the loans held stood at 67 percent; the remainder was tied to profiles below 660.
The 30 day delinquency rate was 3.74 percent, down 10 basis points year over year.
During the question and answer session, Capital One CEO Richard Fairbank said the company continues to make progress with its digital transformation and to go “all in” on the cloud.
Fairbank also said on the call that the firm’s joint efforts with Walmart, with co-branded and private label cards, can be thought of as an opportunity spread among several baskets. He said “there will be a growing front book, which will be the originations that we will do under this new partnership.”