CAPITAL ONE FINANCIAL CORP
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
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Domestic Card Business Results
Domestic Card Business
The Domestic Card business generated net income from continuing operations of $1.2 billion and $918 million in the first quarters of 2025 and 2024, respectively. In the first quarters of 2025 and 2024, the Domestic Card business accounted for greater than 90% of total net revenue of our Credit Card business.
Table 9.1 summarizes the financial results for our Domestic Card business and displays selected key metrics for the periods indicated.
Table 9.1: Domestic Card Business Results
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| (Dollars in millions, except as noted) · 2025 · 2024 · Change | ||||
| Selected income statement data: | ||||
| Net interest income | $5,343 | $4,972 | 7% | |
| Non-interest income | 1,460 | 1,411 | 3 | |
| Total net revenue(1) | 6,803 | 6,383 | 7 | |
| Provision for credit losses | 1,856 | 2,157 | (14) | |
| Non-interest expense | 3,422 | 3,025 | 13 | |
| Income from continuing operations before income taxes | 1,525 | 1,201 | 27 | |
| Income tax provision | 363 | 283 | 28 | |
| Income from continuing operations, net of tax | $1,162 | $918 | 27 | |
| Selected performance metrics: | ||||
| Average loans held for investment | $149,639 | $142,887 | 5 | |
| Average yield on loans(2) | 18.42% | 18.76% | (34)bps | |
| Total net revenue margin(3)(4) | 18.19 | 17.82 | 37 | |
| Net charge-offs | $2,314 | $2,120 | 9% | |
| Net charge-off rate(5) | 6.19% | 5.94% | 25bps | |
| Purchase volume | $154,391 | $146,696 | 5% | |
| (Dollars in millions, except as noted) | March 31, 2025 | December 31, 2024 | Change | |
| Selected period-end data: | ||||
| Loans held for investment | $150,309 | $155,618 | (3)% | |
| 30+ day performing delinquency rate | 4.25% | 4.53% | (28) | bps |
| Allowance for credit losses | $12,036 | $12,494 | (4)% | |
| Allowance coverage ratio | 8.01% | 8.03% | (2) | bps |
(1)We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge off any uncollectible amounts. Finance charges and fees charged off as uncollectible are reflected as a reduction in total net revenue.
(2)Average yield is calculated based on annualized interest income for the period divided by average loans during the period and does not include any allocations, such as funds transfer pricing.
(3)Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans during the period.
(4)The Walmart Program Termination increased Domestic Card net revenue margin by 52 bps in the first quarter of 2025. Excluding this impact, the Domestic Card net revenue margin would have been 17.67% in the first quarter of 2025.
(5)The Walmart Program Termination increased the Domestic Card net charge-off rate by 42 bps for the first quarter of 2025. Excluding this impact, the Domestic Card net charge-off rate would have been 5.77% for the first quarter of 2025.
Because our Domestic Card business accounts for the substantial majority of our Credit Card business, the key factors driving the results are similar to the key factors affecting our total Credit Card business. Net income for our Domestic Card business increased in the first quarter of 2025 compared to the first quarter of 2024 primarily driven by:
Higher net interest income primarily driven by higher average loan balances and the impacts of the elimination of revenue sharing provisions due to the Walmart Program Termination.
| 23 | Capital One Financial Corporation (COF) |
Lower provision for credit losses primarily driven by an allowance release in the first quarter of 2025 compared to an allowance build in the first quarter of 2024.
These drivers were partially offset by:
Higher non-interest expense primarily driven by continued investment in technology and increased marketing spend.
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