Acquisitions Help Capital One Boost Profit 44 Percent
The recent acquisitions of ING Direct and HSBC credit card units helped Capital One post a 44 percent increase in profit during the third quarter.
Capital One reported a quarterly profit of $1.17 billion, up from $813 million in the third quarter of 2011. Revenue jumped 39 percent to $5.78 billion.
“Capital One posted solid results across all of our businesses in the third quarter, including strong contributions from ING Direct and the HSBC U.S. credit card business,” said Chairman and Chief Executive Richard Fairbank in a statement.
The company acquired the ING Direct USA for $9 billion in early 2012, and closed on the purchase of HSBC Holdings in May.
Capital One’s net charge-off rate during the third quarter was 1.75 percent, compared to 2.52 percent in the third quarter of 2011 and 1.53 percent in the prior quarter. The company’s overall delinquency rate was 2.54 percent, compared with 3.13 percent a year ago and 2.06 percent in the previous quarter.
However, the most recent monthly numbers show that delinquencies and charge-off rates have increased. The September delinquency rate rose to 3.52 percent from 3.37 percent in August, while charge-offs rose to 3.93 percent in September from 2.58 percent a month earlier.