Capital One Financial (COF) Q4 2023 earnings summary

Executive summary

• Q4 2023 net income was $706 million, or $1.67 per diluted share; adjusted diluted EPS was $2.24. FY net income was $4.9 billion, or $11.95 per diluted share, with adjusted EPS of $12.52.

• FY 2023 net revenue increased 7% to $36.8 billion; modern technology capabilities were cited as supporting growth and efficiency improvements.

Financial highlights

• Q4 total net revenue was $9.506 billion, up 1% QoQ; net interest income was $7.519 billion, up 1% QoQ and 4% YoY.

• Q4 pre-provision earnings were $3.8 billion, down 16%; FY pre-provision earnings rose 9% to $16.5 billion.

• Q4 provision for credit losses increased $573 million to $2.9 billion, including $2.5 billion in net charge-offs and a $326 million reserve build; FY provision increased $4.6 billion to $10.4 billion.

• Q4 non-interest expense rose 18% to $5.7 billion; FY non-interest expense increased 6% to $20.3 billion.

Segment performance

• Credit Card Q4 revenue rose 14% YoY to $6.796 billion; period-end loans rose 5% QoQ to $154.5 billion, and the net charge-off rate increased to 5.33% from 3.27%.

• Consumer Banking Q4 revenue fell 17% YoY to $2.114 billion; period-end loans declined 2% QoQ to $75.4 billion, deposits rose 9% YoY, and auto originations fell 7% YoY.

• Commercial Banking Q4 revenue was $862 million, down 5% QoQ; period-end loans declined 1% to $90.5 billion, deposits fell 9% QoQ, and the net charge-off rate was 0.53%.

• Commercial office real estate was 2.5% of Commercial Banking loans and 0.7% of total loans; its Q4 annualized net charge-off rate rose to 15.50% from 3.73% QoQ.