April 14, 2010
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News: COF Remains Optimistic
While some credit card companies like JPMorgan Chase & Co and American Express have reported more positive results for the first quarter 2010, other major lenders have not been as fortunate. Capital One Financial Corp. (COF) reported U.S. credit card defaults increased for March to 10.87 percent up from 10.19 in February. Although the bank continued to write off higher numbers of defaults, credit card delinquencies of 30 days or more actually decreased to 5.30 percent from the previous month's 5.51 percent.
Capital One's U.S. customers were alone in neglecting to honor its responsibilities; the bank's international credit card business also experienced increased defaults in March. Rising at a faster rate, the bank's international defaults rose to 9.4 percent in March up from 8.07 percent in February. However, like the U.S. delinquency rate of 30 days or more, international delinquencies decreased to 6.39 percent in March from 6.68 percent in February. Capital One's international market includes Canada and the United Kingdom. U.S. consumer loan write-off's out-performed credit card defaults as they declined to 2.10 percent in March down from 2.50 percent in February. Delinquencies of 30 days or more also decreased in the consumer loan operations to 7.58 percent in March down from 7.99 percent in February.
As COF prepares to confirm these results in its scheduled release April 22nd on first quarter results, the company appears to be optimistic for the remainder of 2010. The company credits positive results for the future based on its effective pricing strategies and its credit card risk reduction activities. It is also expected that COF will turn the corner in the first corner as card defaults peak and begin a slow progressive decline. Important to the success of COF's business plan is a more positive employment environment and increased economic conditions. Capital One if the third largest U.S. issuer of the Visa brand cards and the fifth largest issuer of MasterCard branded cards.