Capital One Financial Corp.'s monthly loan-loss data pleasantly surprised analysts.
The McLean, Va., company said Monday that the percentage of U.S. card loans it deemed uncollectible last month rose 24 basis points from January, to 8.06%. However, the percentage of uncollectible auto loans fell 165 basis points, to 4.44%. That figure slightly improved Capital One's rate of overall credit quality deterioration.
"Broadly speaking, February managed-basis results show credit deterioration leveling off," Bill Carcache, an analyst with Fox-Pitt Kelton Cochran Caronia Waller, wrote in a research note.
"The actual weighted average net chargeoff rate" for Capital One's credit card and auto loan portfolios dropped 9 basis points from January but rose 211 basis points from a year earlier, to 7.21%, he wrote. The February rate was 69 basis points below his estimate.
Scott Valentin, an analyst with Friedman, Billings, Ramsey & Co. Inc., called the numbers "better than anticipated," though he warned that "consumer credit costs will continue to increase due to increasing unemployment, adversely impacting profitability."
Capital One's monthly figures do not include the loans at its retail banking division.