Capital One Financial reported a rise in first-quarter profit on Tuesday, as the consumer lender was helped by a higher income from interest payments on its credit card debt.
Consumers pulled back on discretionary spending amid economic uncertainty, but companies like Capital One are shielded from an industry-wide weakness because of their credit card business, reports Reuters.
Credit card business makes up nearly half of Capital One’s loan portfolio. The lender is the third-largest issuer of Visa and Mastercard credit cards in the United States by balances.
The McLean, Virginia-based company’s net interest income — the difference between what it makes on loans and pays out on deposits — rose 7% to $8.01 billion in the quarter.
Capital One’s quarterly non-interest income, which primarily consists of interchange income, net of reward expenses, service charges and other customer-related fees, rose nearly 4% to $1.99 billion.
However, company executives have flagged further risks to consumer spending as the economy trudges through a volatile period sparked by President Donald Trump’s tariff policy uncertainty.
Net charge-offs, or debts that are unlikely to be recovered, jumped 4.6% to $2.74 billion, the company said.
Capital One’s net income available to common stockholders rose to $1.33 billion, or $3.45 per share, in the three months ended March 31, from $1.20 billion, or $3.13 per share, a year earlier. Shares of the company, which have shed 4.6% in 2025, rose 1.7% in extended trading.
