Capital One Financial (COF) Goldman Sachs 2024 US Financial Services Conference summary

Consumer and credit environment

• Consumer financial health remains strong, with stable debt levels and healthy savings rates, supported by real wage growth and robust labor markets.

• Credit performance has normalized, with charge-offs settling above pre-pandemic levels due to lower recoveries and delayed charge-off effects from pandemic-era stimulus and forbearance.

• Payment rates are higher than pre-pandemic, but a higher share of minimum payments suggests some stress at the margin, particularly in the middle market.

Credit trends and allowance outlook

• Allowance for credit losses rose for eight quarters during normalization but has recently stabilized, with a modest release last quarter as confidence in stabilization increased.

• Further allowance releases are possible if delinquency trends continue to improve, with delinquencies seen as the key indicator for future allowance direction.

Card business growth and consumer spending

• Card purchase volume grew 5% year-over-year in Q3, driven primarily by new account originations rather than increased spend per customer.

• Lower-end consumer spending, which had weakened earlier in the year, has recently turned positive, while overall per-customer spend remains stable.