CAPITAL ONE FINANCIAL CORP

Current report

We are not aware of any material changes from the risk factors set forth under “Part I—Item 1A. Risk Factors” in our 2024 Form 10-K and “Part II—Item 1A. Risk Factors” in our Q2 2025 Form 10-Q.

Previous report

The following discussion sets forth what management currently believes could be the material risks and uncertainties that could impact our businesses, results of operations and financial condition. The events and consequences discussed in these risk factors could, in circumstances we may not be able to accurately predict, recognize, or control, have a material adverse effect on our business, growth, reputation, prospects, financial condition, operating results, cash flows, liquidity, and stock price. These risk factors do not identify all risks that we face; our operations could also be affected by factors, events, or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. In addition, the global economic and political climate may amplify many of these risks.

Previous report

Summary of Risk Factors

Previous report

The following is a summary of the Risk Factors disclosure in this Item 1A. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our securities.

Previous report

•We may not be able to successfully integrate our businesses associated with the Transaction, or such integration may be more difficult, time consuming or costly than expected.

Previous report

•We will continue to incur substantial expenses related to the integration of Discover, and the expenses may be greater than anticipated due to factors, some or all of which may be outside our control.

Previous report

•We may fail to realize all of the anticipated benefits of the Transaction, or those benefits may take longer to realize than expected due to factors that may be outside our control.

Previous report

•The integration of Discover may have an adverse effect on our business and results of operations due to the diversion of a substantial portion of the time and attention of our management team as well as potential employee attrition.

Previous report

•Changes and instability in the macroeconomic environment could disrupt capital markets, reduce consumer and business activity, and weaken the labor market, all of which could impact borrowers’ ability to service their debt obligations and adversely impact our financial results.

Previous report

•Fluctuations in interest rates could adversely affect our business, results of operations and financial condition.

Previous report

•We may not be able to maintain adequate sources of funding and liquidity to operate our business.

Previous report

•We may experience increases in delinquencies and credit losses, or we may incorrectly estimate expected losses, which could result in inadequate reserves.

Previous report

•We may not be able to maintain adequate capital or liquidity levels or may become subject to revised capital or liquidity requirements, which could have a negative impact on our financial results and our ability to return capital to our stockholders.

Previous report

•Limitations on our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends and repurchase our common stock.

Previous report

•A downgrade in our credit ratings could significantly impact our liquidity, funding costs and access to the capital markets.

Previous report

•We face risks related to our operational, technological and organizational infrastructure.

Previous report

•A cyber-attack or other security incident on us or third parties (including their supply chains) with which we conduct business, including an incident that results in the theft, loss, manipulation or misuse of information (including personal information), or the disabling of systems and access to information critical to business operations, may result in increased costs, reductions in revenue, reputational damage, legal exposure and business disruptions.

Previous report

•We face risks resulting from the extensive use of models and data, as well as from our evolving use of AI.

Previous report

•Fraudulent activity associated with our products or our networks could cause our fraud losses to increase, the use of our products to decrease and our brands to suffer reputational damage, all of which could have a material adverse effect on our business.

Previous report

•Compliance with new and existing domestic and foreign laws, regulations and regulatory expectations is costly and complex, and any significant changes may adversely affect our business.

Previous report

•Our required compliance with applicable laws and regulations related to privacy, data protection and data security, in addition to compliance with our own privacy policies and contractual obligations to third parties, may increase our costs, reduce our revenue, increase our legal exposure and limit our ability to pursue business opportunities.

Previous report

•Our businesses are subject to the risk of increased litigation, government investigations and regulatory enforcement.

Previous report

•We face intense competition in all of our markets, which could have a material adverse effect on our business and results of operations.

Previous report

•A change in market preference towards other operators of payment networks and alternative payment providers could result in reduced transaction volume, limited merchant acceptance of our cards, limited issuance of cards on our networks by third parties and materially reduced earnings from our network business.

Previous report

•If we are unsuccessful in creating and maintaining a strong base of network licensees and achieving meaningful global card acceptance, we may be unable to achieve long-term success in our recently acquired international network business.

Previous report

•Our business, financial condition and results of operations may be adversely affected by legislation, regulation and merchants’ efforts to reduce the interchange fees charged by credit and debit card networks to facilitate card transactions.

Previous report

•A reduction in the number of large merchants that accept cards on our recently acquired Discover Network or PULSE Network or in the rates they pay could materially adversely affect our business, financial condition, results of operations and cash flows.

Previous report

•Merchant defaults may adversely affect our business, financial condition, cash flows and results of operations.

Previous report

•If we are not able to invest successfully in and introduce digital and other technological developments across all our businesses, our financial performance may suffer.

Previous report

•We may fail to realize the anticipated benefits of our mergers, acquisitions and strategic partnerships.

Previous report

•Reputational risk and social factors may impact our results and damage our brand.

Previous report

•If we are not able to protect our intellectual property rights, or we violate third-party intellectual property rights, our revenue and profitability could be negatively affected.

Previous report

•Our risk management strategies may not be fully effective in mitigating our risk exposures in all market environments or against all types of risk.

Previous report

•Our business could be negatively affected if we are unable to attract, develop, retain and motivate key senior leaders and skilled employees.

Previous report

•We face risks from catastrophic events.

Previous report

•Climate change manifesting as physical or transition risks could adversely affect our businesses, operations and customers and result in increased costs.

Previous report

•We face risks from the use of or changes to assumptions or estimates in our financial statements.

Previous report

•The soundness of other financial institutions and other third parties, actual or perceived, could adversely affect us.

Previous report

Risks Relating to the Acquisition and Integration of Discover

Previous report

We may not be able to successfully integrate our businesses associated with the Transaction, or such integration may be more difficult, time consuming or costly than expected.

Previous report

The successful integration of two independent businesses is complex, difficult, time-consuming and costly. The success of the Transaction depends, in part, on our ability to successfully integrate Discover’s operations in a manner that results in various benefits and that does not materially disrupt existing customer relationships or materially decrease revenues due to loss of customers. Additionally, the success of the Transaction depends on our ability to successfully integrate Discover into our Framework, compliance systems and corporate culture, which we believe requires extensive investment, including to enhance the risk management function at Discover consistent with our risk management standards and those of regulators, as well as to address remediation obligations under existing and possible future regulatory orders. The difficulties of combining the operations of our businesses include, among others: