Capital One Reports Strong Credit Card Growth
Capital One Financial has released its third quarter earnings statement, which shows strong credit card growth that exceeded analyst estimates. The third quarter has been slow for most of the banking industry, but Capital One has managed to post some impressive numbers.
Capital One reported a 5% growth versus year ago levels. That may not seem strong, but the majority of banks have not reported any growth at all. The company managed to generate $5.9 billion in revenue, exceeding predictions of $5.86 billion. Shares rose to $1.98 for the quarter, up from the estimated $1.93.
To put matters into perspective, shares in the banking industry are down 9% for the year to date, yet Capital One has managed to show a profit for the third quarter.
The key to the company’s success has been the growth of Capital One credit cards. The company reported 12% higher loan balances, which yielded 10% more revenue. Capital One’s credit cards account for 63% of the bank’s revenue, so strong growth in this sector means strong growth for the company as a whole.
Capital One has invested a lot of its earnings into advertising its extensive credit card program, which has helped draw more attention to the products that are keeping the company on top.