Capital One Financial Corporation has seen a 25% drop in profit from the first quarter 2012 to the first quarter 2013. Much of that is due to the fact that the company acquired the online bank ING Direct last year, yielding substantial growth in a short amount of time.
Capital One has seen an increase in domestic credit card sales, but that has been offset by a decline in sales internationally. Nevertheless, the group's chairman and CEO Richard D Fairbank said that "Each of [the] businesses delivered solid results in the quarter and [the] balance sheet is strong."
Capital One's net interest income rose 34% to $4.57 billion this quarter. That is the money earned from their loans. Non-interest income, which comes from service charges and similar fees, fell 35% to $981 million. Auto loan originations also saw a decline, going down 11% from this time last year.
Purchase volume for Capital One credit cards rose 5.5% from the previous year, and credit card debt remains below its 2008 peak (17.2%). The rate of delinquent loans decreased to 3.4%, but charge-offs went up to 4.4%.
Much of the fluctuation in profits stems from the end of the recession. Consumers are now less willing to rack up high credit card bills because they are more financially stable. While this means positive things for the country as a whole, it may not help Capital One and other issuers. Nevertheless, the board members at Capital One remain positive that this next year will be better than the current one.