Among the biggest bank credit card issuers in the U.S., Capital One (COF) continues to lead the way in every metric, except charge-offs. Based on its current trajectory, COF will likely surpass Bank of America (BofA) as the nation’s second largest issuer.
COF posted double digit year-on-year (YOY) gains in outstandings (OUT) and purchase dollar volume (PDV) for the first quarter (1Q/16).
However, the charge-off (CO) ratio has been steadily rising and remains well above industry averages, reflective of its “lower-prime” cardholder base. Furthermore, COF credit card margins have been falling.
COF U.S. card revenue rose 11.7% YOY to $3530 million, compared to $3548 million in the prior quarter and $3164 million for the year ago quarter. For 2015, COF averaged $3333 million per quarter.
COF card income (after-tax) sank 9.2% YOY to $564 million, compared to $514 million in the prior quarter and $621 million for the year ago quarter. For 2015, COF averaged $558 million per quarter.
End-of-Period (EOP) U.S. credit card outstandings soared by 14.2% YOY, compared to 13.0% YOY growth for 4Q/15. At the end of 1Q/16 COF had $84.6 billion in U.S. EOP credit card outstandings, compared to $87.9 billion at the end of the prior quarter and $74.1 billion at the end of the year ago quarter.
Average U.S. credit card outstandings increased 13.8% YOY. During the first quarter COF had $85.1 billion in U.S. average credit card OUT, compared to $83.8 billion for 4Q/15 and $74.8 billion for 1Q/15.
COF U.S. credit card PDV skyrocketed 20.4% YOY to $62.6 billion, compared to $68.7 billion for 4Q/15 and $52.0 billion for 1Q/15.
COF U.S. card delinquency remained down sequentially, but up from year ago levels, in 1Q/16.
COF U.S. consumer credit card 30+ day delinquency increased 17 basis points (bps) YOY, but down 30 bps Quarter-To-Quarter (QTQ) for 1Q/16. The issuer reported a 30+ day DEL ratio of 3.09 for 1Q/16%, compared to 3.39% for 4Q/15 and 2.92% for 1Q/15. (COF does not report 90+ day delinquency)
The COF U.S. consumer credit card charge-off (CO) ratio for 1Q/16 was up 61 bps YOY and up 41 bps QTQ.
The issuer reported a charge-off ratio of 4.16% for 1Q/16, compared to 3.75% for 4Q/15 and 3.55% for 1Q/15.
The COF U.S. credit card average yield (YLD) was up 12 bps QTQ, and up 20 bps YOY. For 1Q/16 the yield was 14.43%, compared to 14.31% for 4Q/15 and 14.23% for 1Q/15.
COF U.S. credit card net revenue margin (NRM) was down 37 bps QTQ and down 35 bps YOY. For 1Q/16 the NRM was 16.58%, compared to 16.95% for 4Q/15 and 16.93% for 1Q/15.
CAPITAL ONE U.S. CARD PORTFOLIO
1Q/15: $3164 million
2Q/15: $3191 million
3Q/15: $3427 million
4Q/15: $3548 million
1Q/16: $3530 million
1Q/15: $621 million
2Q/15: $458 million
3Q/15: $639 million
4Q/15: $514 million
1Q/16: $564 million
CARD EOP OUT
1Q/15: $74.1 billion
2Q/15: $79.0 billion
3Q/15: $82.2 billion
4Q/15: $87.9 billion
1Q/16: $84.6 billion
CARD AVG OUT
1Q/15: $74.8 billion
2Q/15: $75.9 billion
3Q/15: $80.4 billion
4Q/15: $83.8 billion
1Q/16: $85.1 billion
1Q/15: $52.0 billion
2Q/15: $62.2 billion
3Q/15: $63.8 billion
4Q/15: $68.7 billion
1Q/16: $62.6 billion
CARD 30+ DEL
CARD AVG YLD
NRM – Calculated based on annualized interest income for the period divided by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.
Source: Capital One
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