Cap One Auto Posts Higher Earnings
Despite a $111.9 million loss, Capital One Financial Corp. saw improvement in its auto finance portfolio in the first quarter.
Cap One Auto Finance earned $71.4 million last quarter — its highest profit since mid-2006 — and the unit was the company’s only lending business to post lower delinquency and chargeoff rates. The improved loan performance comes amid slowing origination volume, which often results in higher — not lower — delinquency rates.
Cap One Auto’s 30-day delinquency rate improved to 7.52% in the first quarter, from 9.91% in the final quarter of 2008. Its chargeoff rate fell to 4.88% from 5.67% during the same period.
In the past year, Cap One has scaled back auto origination volume. Last quarter it originated $1.46 billion of loans, down from $2.44 billion in 1Q08.
Here’s a chart of Cap One Auto’s originations versus delinquencies:
