CAPITAL ONE FINANCIAL CORP
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
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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.
Sep 30, 2026 · Filed Nov 3, 2026
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Risk Management
Risk Management Framework
Our Risk Management Framework (the “Framework”) sets consistent expectations for risk management across the Company. It also sets expectations for our “Three Lines of Defense” model, which defines the roles, responsibilities and accountabilities for taking and managing risk across the Company. Accountability for overseeing an effective Framework resides with our Board of Directors either directly or through its committees. The Company continues integrating Discover into Capital One’s risk management framework and expects to substantially complete our risk management integration in 2027.
| First LineIdentifies and Owns Risk | Second LineAdvises & Challenges First Line | Third LineProvides Independent Assurance | |
| Definition | Business areas that are accountable for risk and responsible for: i) generating revenue or reducing expenses; ii) supporting the business to provide products or services to customers; or iii) providing technology services for the first line. | Independent Risk Management (“IRM”) and Support Functions (e.g., Human Resources, Accounting, Legal) that provide support services to the Company. | Internal Audit and Credit Review. |
|---|---|---|---|
| Key Responsibilities | Identify, assess, measure, monitor, control and report the risks associated with their business. | IRM: Independently oversees and assesses risk-taking activities for the first line of defense.Support Functions: Centers of specialized expertise that provide support services to the enterprise. | Provides independent and objective assurance to the Board of Directors and senior management that the systems and governance processes are designed and working as intended. |
| 37 | Capital One Financial Corporation (COF) |
Our Framework sets consistent expectations for risk management across the Company and consists of the following nine elements:
| Governance and Accountability | |||
|---|---|---|---|
| Strategy and Risk Alignment | |||
| Risk Identification | Assessment, Measurementand Response | Monitoring and Testing | Aggregation, Reporting and Escalation |
| Capital and Liquidity Management (including Stress Testing) | |||
| Risk Data and Enabling Technology | |||
| Culture and Talent Management | |||
We provide additional discussion of our risk management principles, roles and responsibilities, framework and risk appetite under “Part II—Item 7. MD&A—Risk Management” in our 2025 Form 10-K.
Risk Categories
We apply our Framework to protect the Company from the major categories of risk to which we are exposed through our business activities. The Framework was revised in the third quarter of 2026 to remove Reputation risk and add Franchise risk. These changes continue to enable effective outcomes of our key processes supporting the identification, assessment, measurement, monitoring, controlling and reporting of risk. Franchise Risk is defined as the risk of a material impact to Capital One’s business objectives or franchise value due to the negative perceptions held by our key constituents regarding our business strategies and activities. We provide a description of the remaining major categories of risk and how we manage them under “Part II—Item 7. MD&A—Risk Management” in our 2025 Form 10-K.
Compliance risk
Credit risk
Liquidity risk
Market risk
Operational risk
Strategic risk
Franchise risk
| 38 | Capital One Financial Corporation (COF) |
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