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Capital One Financial Corporation (COF) is facing a challenging credit environment as its net charge-offs (NCOs) and delinquencies rise. As of October 2025, domestic credit card NCOs increased to 4.77%, a rise of 42 basis points from September, while delinquencies climbed to 4.99%, up 10 basis points. Both metrics are above pre-pandemic levels, where NCOs were 4.68% and delinquencies 3.88% in February 2020.
During the nine months ending September 30, 2025, provisions for credit losses surged by 82% year-over-year to $16.5 billion, partly due to the recent acquisition of Discover Financial. Meanwhile, Capital One’s loans held for investment in domestic credit cards reached $254.2 billion, with auto loans at $82.5 billion.
The divergence in credit performance is driven by emerging economic pressures, with affluent borrowers remaining resilient while lower-income segments struggle. Capital One’s credit performance is expected to be influenced by ongoing inflationary headwinds and uneven economic recovery.
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