Two Credit Card Operations Report Large Profits
FALLS CHURCH, Va.-Two large credit card operations are reporting increases in income. Capital One Financial Corp., one of the nation's biggest credit card banks, said net income for its fiscal fourth quarter rose 39% to $177.7 million, or 80 cents a share, form $128.3 million, or 61 cents a share, for the same period last year.
As a result, Capital One, one of the major engines behind bankruptcy reform legislation, said its profits for the year climbed 37% to $624 million, or $2.91 a share, from $469.6 million, or $2.24 a share, in 2000.
The credit card bank said its managed net charge-off rate rose to 4.42% in the fourth quarter, from 3.92% at the end of the third quarter; while its managed delinquency rate (30 days or more late) fell to 4.95%, from 5.20% at the end of the third quarter.
In Minnetonka, Minn. meanwhile, credit card bank Metris Companies, Inc., reported a 46% spike in fourth-quarter profit Wednesday to $70.7 million, or 72 cents a share, compared to $48.6 million, or 52 cents a share, for last year's fourth quarter.
As a result, Metris reported annual profits of $260.3 million for the year, 36% more than last year's $191.9 million. The company said its net charge-off ratio jumped to 11.8% of managed receivables in the fourth quarter from 9.7% in 2000's fourth quarter, and the delinquency rate, a harbinger of future losses, rose to 9.4% from from 8.3% during the period.