Capital One profit climbs 10% as credit-card spending increases

Net income rose 10% from a year earlier to $1.4 billion, or $3.45 a share, McLean, Virginia-based Capital One said Tuesday in a statement. Adjusted earnings per share, which exclude the cost of the Discover integration and other items, totaled $4.06, beating the $3.63 average estimate of analysts surveyed by Bloomberg.

Net revenue rose 6% to $10 billion, short of the $10.05 billion expected by Wall Street.

Purchase volume on the bank’s credit cards rose 5% to $157.9 billion, the company said in a separate presentation. The net write-off rate for card loans rose 12 basis points from the preceding quarter to 6.14%, beating estimates.

Consumer spending in the US, which accounts for the vast majority of Capital One’s card loans, got a jolt late in the first quarter as people raced to purchase cars, electronics and appliances in an attempt to get in front of President Donald Trump’s threatened tariffs. US retail sales surged 1.4% in March from the preceding month, the most in more than two years.

Bank of America Corp. Chief Executive Officer Brian Moynihan said last week that consumer spending has remained resilient. “Consumers are still solidly in the game,” he told analysts. “What they’ll do next, different question, but right now they’re still solid.”

“The combination of Capital One and Discover will create a leading consumer banking and payments platform with unique capabilities, modern technology and powerful brands,” Capital One CEO Richard Fairbank said in the statement.

Capital One’s credit-card loans outstanding totaled $157.2 billion at the end of March, a 4% increase from a year earlier. Provision for credit losses fell by $273 million to $2.4 billion, less than Wall Street’s average estimate of $2.79 billion.

Shares of Capital One rose 1.7% to $173.10 in extended trading at 4:20 p.m. in New York. The stock had dropped 4.6% this year through the close of regular trading.