Capital One Decides to Wind Down Discover Home Equity Business

Group 1: Capital One's Business Strategy - Capital One Financial Corporation (COF) has decided to wind down the home equity lending business acquired from Discover Financial, following a strategic review [1][2][11] - The company will stop new originations but will continue servicing the existing portfolio and explore options for sale and servicing [2][11] - The decision to exit this business was made to better align with Capital One's overall business portfolio [2] Group 2: Acquisition Details - Capital One acquired Discover Financial Services for $35 billion in May 2025, significantly reshaping the credit card industry [4] - The acquisition allows Capital One to capture a larger share of card spending and compete more effectively with major card issuers [5] - The deal faced regulatory scrutiny but received final approval in April 2025, with conditions to address enforcement issues related to Discover Financial [6][7] Group 3: Financial Performance and Outlook - Capital One's revenues have been driven by acquisitions, with a five-year compound annual growth rate of 6.5% projected from 2019 to 2024 [9] - The company has seen a 22.3% increase in share price this year, outperforming the industry growth of 21.9% [10] - The acquisition of Discover Financial is expected to enhance revenue prospects due to strong credit card and online banking businesses [9]