HTaufReisen
Level 2 Member
http://www.fool.com/investing/general/2015/10/22/timesensitive-capital-one-earnings-show-impressive(dot)aspx
The credit-card business is booming.
When you look at the performance of Capital One's consumer and commercial banking divisions during the quarter, it's understandable if you're not impressed. In consumer banking, loans were flat, and revenue grew just 1% from a year ago. Commercial banking wasn't much better -- average loans were up 6% year over year, but revenue was flat.
That leaves Capital One's bread and butter -- the credit-card business, which posted some impressive results. Loan balances were up 12% from last year, and generated 10% more revenue. Impressively, noninterest expense increased by just 7%, largely due to increased spending on marketing, which certainly appears to be working.
The company has done a tremendous job of making consumers aware of its cards. After all, who hasn't seen the Samuel L. Jackson commercials promoting the Quicksilver card? {no way} Or how about the many ads promoting the Venture card -- which is actually one of the best all-around credit cards in the market, as I've written before {it depends - $200 cash for hard pull?}
Most of the other banks with substantial credit-card operations saw revenues climb, as well, though not as impressively as Capital One. So why were their results not quite as impressive? Simply put, Capital One's credit-card business makes up a dominant share (63%) of the company's revenue. In contrast, Bank of America has a large credit-card business -- it issued 1.3 million new cards in the third quarter alone -- but the revenue it derives from credit cards makes up roughly 15% of the company's total.
Looking forwardCapital One delivered excellent performance in the quarter by doing what it does best -- offering some of the most attractive credit-card products in the market, and allocating lots of capital to get the word out. The bank is well-positioned to take advantage of any increase in interest rates, as spreads tend to widen when rates rise, and is committed to sustaining its growth going forward.
I would avoid the Quicksilver card but the Spark BIZ with $500 sign-up cash incentive and 2% CB on everything (no questions asked; $59 fee second year) looks good.
The credit-card business is booming.
When you look at the performance of Capital One's consumer and commercial banking divisions during the quarter, it's understandable if you're not impressed. In consumer banking, loans were flat, and revenue grew just 1% from a year ago. Commercial banking wasn't much better -- average loans were up 6% year over year, but revenue was flat.
That leaves Capital One's bread and butter -- the credit-card business, which posted some impressive results. Loan balances were up 12% from last year, and generated 10% more revenue. Impressively, noninterest expense increased by just 7%, largely due to increased spending on marketing, which certainly appears to be working.
The company has done a tremendous job of making consumers aware of its cards. After all, who hasn't seen the Samuel L. Jackson commercials promoting the Quicksilver card? {no way} Or how about the many ads promoting the Venture card -- which is actually one of the best all-around credit cards in the market, as I've written before {it depends - $200 cash for hard pull?}
Most of the other banks with substantial credit-card operations saw revenues climb, as well, though not as impressively as Capital One. So why were their results not quite as impressive? Simply put, Capital One's credit-card business makes up a dominant share (63%) of the company's revenue. In contrast, Bank of America has a large credit-card business -- it issued 1.3 million new cards in the third quarter alone -- but the revenue it derives from credit cards makes up roughly 15% of the company's total.
Looking forwardCapital One delivered excellent performance in the quarter by doing what it does best -- offering some of the most attractive credit-card products in the market, and allocating lots of capital to get the word out. The bank is well-positioned to take advantage of any increase in interest rates, as spreads tend to widen when rates rise, and is committed to sustaining its growth going forward.
I would avoid the Quicksilver card but the Spark BIZ with $500 sign-up cash incentive and 2% CB on everything (no questions asked; $59 fee second year) looks good.
I have 250$ deductible....feeling good that I chose the lower number...although waiting on the estimate of the repair right now to see how big the bill is