Costs associated with a customer refund reserve in the United Kingdom contributed to a decline in Capital One Financial's third-quarter profit.
Net income at the $345 billion-asset company fell 11% to $962 million from a year earlier. Earnings per share fell 4% to $1.90.
Capital One spent $63 million during the quarter to record a build in the U.K. Payment Protection Insurance customer refund reserve. Without that expense, earnings per share would have risen 3% to $2.03.
Net interest income after the loan-loss provision rose 1% to $3.7 billion. The provision rose 45% to $1.6 billion.
U.S. credit card loans held for investment rose 11% to $91 billion. Net revenue from domestic credit cards rose 8% to $3.7 billion. Net chargeoffs on domestic credit cards rose 66 basis points to 3.74%. The percentage of credit card loans in the U.S. that were at least 30 days late rose 40 basis points to 3.68%.
Noninterest income rose 4% to $1.2 billion on higher interchange fees. Noninterest expense rose 6% to $3.4 billion on higher salaries, communications and data processing fees.
