Capital One Financial posted a 17% rise in net income in the fourth quarter thanks largely to growth in its U.S. credit card business.
The McLean, Va., company reported $999 million in profits, up from $852 million in the fourth quarter of 2013. Earnings per share were $1.73, a 21% increase from a year earlier.
The firm's total net revenue rose by 5%, to $5.81 billion. Net interest income also went up by 5% to $4.66 billion, while noninterest income increased by 3% to $1.16 billion.
The $300 billion-asset company also defied the banking industry trend of shrinking net interest margins. Capital One's net interest margin rose to 6.81% in the fourth quarter from 6.73% a year earlier.
"2014 was a strong year for Capital One," Chief Executive Officer Richard Fairbank said in a news release Thursday. "We're poised to build on the momentum in 2015."
The company reported that its provision for credit losses rose to $1.11 billion in the fourth quarter, up 16% from a year earlier.
The rise in loss provisioning reflects a larger trend across the U.S. credit card industry. After years of shrinking balances, the industry is finally enjoying loan growth, and card issuers are expecting the rising balances to result over time in higher credit losses.
On Wednesday, Discover Financial Services reported that its provision for loan losses grew to $457 million in the fourth quarter, up 29% from a year earlier. American Express Co.'s fourth-quarter provision for losses totaled $582 million, up 22% from the same period in 2013.
Like some of its competitors in the credit card business, Capital One expanded its portfolio of U.S. card loans in the fourth quarter. Period-end loans held for investment totaled $77.7 billion, up 6% from the same period a year earlier.
Purchase volume on U.S. credit cards totaled $58.2 billion in the quarter, a 16% increase from a year before. Net interest income in the domestic card business rose by 6% to $2.43 billion, while noninterest income in the segment increased by 3% to $768 million.
Meanwhile, the percentage of U.S. credit card loans that were 30 days or more delinquent fell to 3.27%, down from 3.43% in the fourth quarter of the previous year.
Results in other segments of Capital One's business were less strong.
Net interest income in the company's consumer banking segment which includes mortgages and auto lending fell by 1% to $1.46 billion, while noninterest income fell by 5% to $185 million.
In Capital One's commercial banking business, net interest income rose by 2% to $455 million in the fourth quarter. Noninterest income totaled $132 million, a 1% increase.
Companywide, noninterest expenses were up 2%, as an increase in marketing spending more than offset a decrease in expenses related to acquisitions.