Capital One Auto Loan Charge Offs Rise as Cards Stabilize

Capital One Financial Corp. (NYSE: COF) said in a regulatory filing with the Securities and Exchange Commission last week that the percentage of problem auto loans is continuing to grow.

Capital One reported that in July its net charge-off rate for auto loans had risen to 4.67 percent, up from 4.26 percent in June, and the third monthly increase ("Capital One Credit Card Charge Offs Rise," June 16).

Additionally, the percentage of auto loans at least 30 days late rose for the fifth straight month, rising to 8.33 percent in July, compared to 7.62 percent in June.

However, the McLean, Va.-based company reported that the charge-off rate for credit cards improved from the previous month. The charge-off rate was 6.08 percent in July, down from 6.42 percent in June. But the credit card delinquency rate rose from 3.85 percent in June to 3.96 percent in July.

In March, the rate stood at 4.04 percent, while in January it was reported at 4.36 percent. However, the January annualized credit card charge off rate was 5.98 percent.

The financial services company’s international operations also showed continuing softness, with the charge-off rate rising to 6.55 percent in July, up from 5.36 percent in June. The delinquency rate for international operations fell from 5.35 percent in June to 5.22 percent in July.