Capital One Financial Reports Rise in First-Quarter Profit

(Reuters) – Capital One Financial reported a rise in first-quarter profit on Tuesday, as the consumer lender benefited from increased income from interest payments on its credit card debt.

Consumers have reduced discretionary spending amid economic uncertainty; however, Capital One (NYSE:COF) remains insulated from broader industry weakness due to its robust credit card business.

Interest rates on credit card debt are significantly higher than those on mortgages and other types of loans. The credit card sector constitutes nearly half of Capital One’s loan portfolio, making it the third-largest issuer of Visa (NYSE:V) and Mastercard (NYSE:MA) credit cards in the U.S. by balances.

In the quarter, the McLean, Virginia-based company reported a 7% increase in net interest income — the difference between income from loans and what it pays out on deposits — which reached $8.01 billion.

Capital One’s quarterly non-interest income, primarily from interchange income, net of reward expenses, service charges, and other customer-related fees, rose nearly 4% to $1.99 billion.

Nonetheless, executives have pointed out potential risks to consumer spending as the economy navigates a turbulent period triggered by President Donald Trump’s tariff policy uncertainty.

The company noted a 4.6% increase in net charge-offs—debts unlikely to be recovered—reaching $2.74 billion.

Net income available to common stockholders surged to $1.33 billion, or $3.45 per share, for the quarter ending March 31, compared to $1.20 billion, or $3.13 per share, a year earlier.

Following a 4.6% decline in 2025, shares of Capital One rose 1.7% during extended trading.

Discover Regulatory Nod

U.S. banking regulators approved Capital One’s $35.3 billion acquisition of Discover Financial Services (NYSE:DFS) last week, allowing the combined companies to emerge as the nation’s eighth-largest bank.

The deal, which is set to close on May 18, will establish Capital One as the leading U.S. credit card issuer by balances while providing control over Discover’s extensive card payment network.