Capital One Financial’s first quarter 2012 earnings benefited from the company’s recently closed acquisition of ING Direct, according to Fitch, a debt rating firm.
ING Direct is based in Wilmington and Capital One plans to expand employment in northern Delaware.
Excluding the effects of the ING Direct deal, Capital One’s first quarter earnings were $868 million, up from $407 million in fourh quarer, but down slightly from $1 billion in the first quarter of last year..
The biggest driver for Capital One was largely due to higher revenue, both including the ING Direct acquisition and from growth in the company’s older businesses.
Capital One’s total revenue from its legacy portfolio grew 5.2 percent from the fourth quarter thanks to strong growth in auto loans as well as strong auto finance originations during the quarter. Fitch notes that auto lending continues to be a strong area of growth for Capital One.
As the ING Direct assets (primarily adjustable rate mortgage loans) are paid down and Capital One brings additional higher yielding credit card loans from the closing of the HSBC card acquisition at some point in the second quarter of this year’s Fitch expects further improvements.
Fitch does note that COF continues to increase its reserve for mortgage representation and warranty claims.
Fitch notes that Capital One’s credit quality metrics continue to be good. Overall net charge-offs during the quarter were 2.04 percent, down from 2.69 percent at the end of 2011.
Additionally, 30+ day delinquency rates declined in both the card and consumer banking segments. Overall non-performing assets have remained have remained at a healthy level.
