Capital One FinancialCorp. remains bullish about the credit card and auto business as competitionincreases, Chairman, President and CEO Richard Fairbank said during a July 21 earningscall.
That competition could impact the long-term growth and creditquality of the business, he said.
"While we always watch vigilantly for these effects, wecontinue to find attractive growth opportunities in the parts of the market we'vebeen focusing on for some time," he said. The bank is seeing more competitionin rewards and marketing, he added.
The bank is also concerned about the underwriting practices forthe auto lending business and competitive practices in the subprime area, he said. The company's auto portfolio is a mix of smallercars and some trucks and prices for smaller vehicles are declining, he said.
The financial institution increased its reserves in the secondquarter to address risks in the taxi medallion sector, executives said.
The bank reported second-quarter net income available to commonstockholders of $871 million, or $1.69 per diluted common share, compared to netincome available to common stockholders of $830 million, or $1.50 per share, inthe year-ago quarter. Net interest margin for the period was 6.73%, compared to6.75% for the previous period and 6.56% for the year-ago period.
Net charge-offs in the period were $1.16 billion, compared to$1.18 billion in the previous period and $846 million in the same quarter a yearago. The quarter's allowance for loan and lease losses was $5.88 billion, comparedto $5.42 billion in the preceding period and $4.68 billion in the year-ago period.