Profits at Capital One Financial (NYSE:COF) soared by a stronger-than-expected 50% in the second quarter as the financial services company continues to capitalize on improving credit conditions.
McLean, Va.-based Capital One said it earned $911 million, or $1.97 a share, last quarter, compared with a profit of $608 million, or $1.33 a share, a year earlier. Analysts had called for EPS of just $1.71.
Revenue increased 2.3% to $3.99 billion, trailing the Streets view of $4.02 billion.
Capital One said its loan-loss provisions plunged last quarter to $343 million from $723 million a year earlier. Net charge offs slid to 2.91% from 5.35% a year before.
Our second quarter performance demonstrates that Capital One remains well positioned to continue to deliver attractive and sustainable results, including loan growth, deposit growth, strong returns and robust capital generation, CEO Richard Fairbank said in a statement.
To help pay for its $9 billion acquisition of ING Groups U.S. online-banking business, Capital One said it plans to sell $2 billion of shares. The stock sale is being run by Barclays (NYSE:BCS), Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM).
Despite the earnings beat, shares of Capital One eased ahead of Wednesdays open. The bar had already been set high as Capital One is up more than 22% year-to-date.