Capital One's Card Purchase Volumes Grow 7%, Consumer Credit Trends ‘Stable'

Capital One's Q4 Performance - Card purchase volumes surged by 7% to $1729 billion, indicating strong consumer spending [1] - Net charge-off rate increased to 6% from 53% a year ago, partly due to the end of the Walmart card partnership and loss sharing agreement [1][2] - 30-day-plus delinquency rate improved year-over-year, dropping to 453% from 461% [3] - Average loans increased by 6%, driven by steady top-line growth and strong margins in the domestic card business [2] Consumer Banking Segment - Auto originations grew by 53% year-over-year, attributed to market growth and the company's strong position in pursuing resilient growth [4] - Ending loans in the consumer banking portfolio increased by 4% year-over-year [5] - Consumer deposits rose by 7% to$ 3183 billion at the end of the quarter [5] - Credit tightening measures in anticipation of credit score inflation and declining vehicle values resulted in relatively low originations [5] Consumer Trends and Economic Outlook - The US consumer remains a source of strength in the economy, with a strong labor market and stable unemployment rates [7] - Real incomes are growing steadily as inflation settles, though some consumers face pressure due to incomes not keeping up with inflation [7][8] - Consumer debt servicing burdens are stable near pre-pandemic levels, with higher bank account balances compared to pre-pandemic times [8] - The proportion of customers making minimum payments is above pre-pandemic levels, observed across the credit spectrum [9] Strategic Developments - The acquisition of Discover Financial Services remains on track and is expected to close early this year [6]