Capital One Financial Corp. CFO Steve Crawford and Director of Investor Relations Jeff Norris told analysts at the
Barclays America Select Franchise Conference Wednesday that pricing and competition in auto finance has changed
dramatically since 2008. Crawford said pricing had largely followed an expected trend. Looking back, he said the bank
had probably been conservative with forecasting, at least in terms of margins, which are clearly under pressure. The bank’s
subprime operations have stayed level. He also said the higher volume of originations at Cap One has been driven by prime loans.
Crawford said the bank has always focused heavily on cycle management and the understanding of where it sits in the cycle. “We
haven’t passed even close to the point of where the alarm bells are going off in the auto industry, but it’s something we’re watching
carefully,” he said. Norris added that most cyclical pressure has been on pricing and margins, and less so on credit terms and
conditions. Holistically, he said there are a small number of large auto finance competitors who move the needle in the business, and furthermore, those lenders tend to be more rational.
