Capital One earned $375.6 million in the fourth quarter as income from fees and interest rose while loan-loss provisions fell.
The company, one of the nation's largest credit card issuers, reported Thursday that it earned 83 cents per share in the last three months of the year. That compares with a loss of $1.45 billion, or $3.74 cents per share, in the same period a year ago at the height of the credit crisis. In that period, Capital One was forced to set aside billions to cover bad loans in its credit card and auto finance businesses.
"This is a much better picture than a year ago," said Red Gillen, a senior analyst with Celent, a Boston-based financial research and consulting firm. "The worst is behind them."
Revenue rose 6.2 percent to $3.37 billion from $3.17 billion. Net interest income rose 8.4 percent while non-interest income rose 3.2 percent. A lower provision to cover soured loans also helped performance. Loan loss provisions sank to $843.7 million from $2.1 billion in the year ago quarter.
Capital One, along with rival consumer banking companies, has been hit with rising credit-related losses as consumers have struggled to pay bills amid a tough job market. Some numbers in the company's earnings release, such as the lower loan loss provision, suggested credit troubles may be easing.
The 30-day delinquency rate on loans dipped to 4.13 percent from 4.37 in the year-ago quarter. Delinquencies are a good indicator of future loan losses, so the drop is a positive sign.
The charge-off rate, however, rose. The metric, which reflects loans the company no longer expects will be paid back, rose to 5 percent from 4.21 percent a year ago.
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