Capital One Financial Corp., the bank that gets more than half of its revenue from credit cards, reported profit that missed analysts’ estimates as the lender set aside $1.1 billion to cover credit losses.
Second-quarter net income declined to $830 million, or $1.50 a share, from $1.18 billion, or $2.04, a year earlier, the McLean, Virginia-based firm said Thursday in a statement. Profit excluding certain items was $1.78 a share, missing the $1.97 average estimate of 26 analysts surveyed by Bloomberg.
Credit-card write-offs, which reached historic lows in 2014, probably will rise this year, Chief Executive Officer Richard Fairbank said in January. The company has sought to expand its commercial lending and energy investment-banking businesses.
“While loan growth is expected to be strong and credit quality should be benign, we note there is still a cost to growth, in the form of both expenses and its loan-loss provision,” Jason Goldberg, a Barclays Plc analyst, said in a note to investors before earnings were announced.
Capital One declined more than 5 percent in extended trading at 4:29 p.m. to $86 after the earnings announcement. It had climbed 10 percent this year through the close of regular trading, compared with the 7.4 percent advance for the 24-company KBW Bank Index.