Capital One Financial Corp., the McLean, Va., credit card lender and banking company, said Monday that its car loan delinquencies rose 34 basis points from October, to 9.48% last month.
At an annual rate, the company charged off 5.6% of its roughly $22 billion of auto loans in November, 10 basis points more than in October, it said in a Securities and Exchange Commission filing.
Capital One has "certainly been restricting loan originations given the challenges of the business," said Michael Taiano, a Sandler O'Neill & Partners LP analyst based in New York.
Auto lending is on a "long list of things that are not good," he said.
Mr. Taiano rates Capital One's shares "hold."
High delinquency statistics are not surprising, he said, and auto lending "has been a business that has been performing poorly from a credit standpoint for over a year now."
Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co., said in an interview Monday, "Used car values are collapsing. It's just showing the evaporation of demand by consumers."
Capital One has slashed its exposure to auto lending this year.
In October, it said it planned to stop making inventory loans to dealerships in its New York and New Jersey markets. The $154.8 billion-asset Capital One said it would continue to lend to dealers in Texas and Louisiana.
In July the company said that it had exceeded its goal of halving auto loan originations from fourth-quarter levels, to $1.5 billion in the second quarter.
Richard Fairbank, Capital One's chairman, president, and chief executive officer, has said he would consider closing the auto lending business if it fails to meet risk-adjusted returns.
Capital One is not alone; Regions Financial Corp. said in October that at the end of the year it will stop making auto loans through dealerships.
The Manheim Used Vehicle Value Index showed that wholesale used car prices fell 5.7% in November after declining 6% in October and have shown "unprecedented weakness for the last two-and-a-half months."
"There are lenders that are looking at businesses that haven't been particularly good performers — auto being one of them — and this is one of the areas a number of lenders have scaled back on," Mr. Taiano said in an interview Monday.
Capital One also said that U.S. credit card payments more than 30 days late rose 22 basis points from October, to 4.7% last month.
Its shares were off 3.5%, to $27.14, in midafternoon trading. They have declined about 40% this year through Friday.
Capital One has agreed to buy the $15.5 billion-asset Chevy Chase Bank of Maryland (see related story).