Capital One 30-Day Delinquencies 4.83% In July Vs 4.77% In Jun
August 17 2009 - 9:59AM
Dow Jones News
Capital One Financial Corp. (COF) said Monday that U.S.
borrowers at least a month behind their card payments increased to
4.83% in July from 4.77% in June.
In addition, the bank and credit-card issuer wrote off 9.835% of
its card loans last month, compared with 9.73% in June, according
to a regulatory filing Monday.
Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods, says
in a note Monday that the amount of card debt that Capital One
wrote off in July is "trending better than our estimates." Sakhrani
expects card losses for the overall industry to peak in the fourth
quarter or even early next year.
This monthly report card on the performance of credit-card
loans, including those packaged into bonds, comes amid heightened
scrutiny around credit as strapped borrowers increasingly fall
behind on payments. These reports provide a window into the
potential losses facing card issuers and the amount they may need
to squirrel away as reserves.
Issuers of plastic, including Capital One, JPMorgan Chase &
Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C),
Discover Financial Services (DFS) and American Express Co. (AXP),
are not only coping with losses stemming from credit-card loans
going bad, but also sweeping legislation that will bite into
income. To fight the losses, card issuers are scaling back on
credit and getting tougher on who they lend to.
Capital One's shares traded at $34, ahead of the U.S. stock
market open. The shares closed at $35.08 on Friday.
A company spokeswoman was unavailable for comment.
-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729;
aparajita.saha-bubna@dowjones.com