Capital One Financial (COF) UBS Financial Services Conference summary

Consumer spending and credit trends

• High-end consumer spending was flat in early 2024, then picked up in the latter half; subprime spending accelerated more, ending the year with both segments at similar levels.

• Overall spend exited Q4 2024 at 7% year-over-year growth, up from 5% earlier in the year.

• Average payment rates stabilized above pre-pandemic levels, but more customers at the margin are making only minimum payments.

• Delinquency rates improved relative to seasonality by year-end, with December rates lower year-over-year.

• Loss rates remain above pre-pandemic levels but are trending downward, with close monitoring of delayed charge-off effects and recovery rates.

Competitive strategy and growth outlook

• Competition in the premium card segment remains intense, with focus on both product features and customer experiences.

• Sustained investment in experiences and services is key to winning high-end customers, with strong loyalty and low attrition observed.

• Card growth in 2025 will depend on both organic spend per customer and new account acquisitions, with credit line management in line with historical practices.

• Continued strong traction in customer originations and opportunities for further growth are anticipated.

Deposit and interest rate management

• Deposit strategy remains unchanged, with strong growth and a deposit beta in Q4 of 11, similar to the last rate cycle.

• Future betas may be higher due to slower Fed moves, higher terminal rates, and ongoing product mix rotation.

• Monitoring industry demand, loan growth, and competitor behavior to adjust deposit pricing as needed.