Capital One Financial (COF) investor relations material

Integration and synergy progress

• Integration of Discover is on track, with $2.5 billion in combined revenue and expense synergies expected by Q2 2027, driven initially by debit conversion and later by expense reductions.

• The debit card migration to the Discover Network is complete, with credit card migration to follow, targeting $175 billion in spend for the initial wave.

• Revenue synergies are materializing faster, while expense synergies will be realized toward the end of the two-year integration window.

• Investments in international acceptance and network branding are prioritized to support further migration and growth.

• The Brex acquisition is seen as a strategic opportunity, leveraging its vertically integrated tech stack for business payments growth.

Financial outlook and investment strategy

• Earnings power post-Discover integration is expected to remain consistent with initial projections, despite various headwinds and tailwinds.

• Near-term efficiency ratio will be pressured by ongoing investments, but long-term earnings power is maintained.

• Retail deposit growth and stronger margins have outperformed expectations, supporting the investment agenda.

• Capital return plans remain intact, with a flexible approach to share repurchases and a healthy CET1 capital ratio of 14.3%.

• The company continues to lean into technology-driven investments, enabled by years of tech transformation.

Consumer and portfolio trends

• Consumer credit quality and spending are described as stable, with delinquencies improving through mid-2025 and then flattening.

• Growth in card outstandings has moderated post-COVID, with legacy business picking up and Discover portfolio still shrinking.

• All consumer segments, including lower FICO and income, are performing similarly, reflecting portfolio stability.

• The company anticipates reigniting Discover growth after full integration and technology migration.

• Retail banking is positioned as a digital-first, low-cost, full-service offering with no fees, minimums, or overdraft charges.