NEW YORK — Capital One Financial Corp. reported a small increase in third-quarter profit Thursday as the bank's loan writeoffs and delinquencies continued to fall.
The McLean, Va., company said net income was $813 million, or $1.77 per share, in the quarter ended Sept. 30, up from $803 million, or $1.76 per share, a year ago. Revenue increased to $4.2 billion, up 3.4% from a year ago.
Analysts were expecting on average earnings of $1.68 per share on revenue of $4.04 billion, according to Thomson Reuters.
Capital One's shares closed up 1.9%, at $40.49, and fell 0.2% in after-hours trading.
Capital One, which transformed itself from a card lender to a bank just before the recession, has been working to expand through acquisitions.
In June, the company won a bid to buy ING Direct for $9 billion. The deal, which would be the first big bank merger since the passage of federal legislation last year aimed at stemming risks from large financial institutions, is expected to close next year. However, the Federal Reserve Board recently said it was expanding its review of the deal amid concerns from some legislators and consumer groups that it would result in a "Too Big To Fail" institution.
Capital One is also buying HSBC's U.S. credit card business, which includes about $30 billion in loans, for $2.6 billion. The deal is expected to close in the second quarter of 2012 and would make it the largest issuer of private-label credit cards.
The company expects the acquisitions will "put us in an even stronger position to enhance and sustain the value we can deliver to our customers, our communities and our shareholders," Richard Fairbank, chairman and chief executive, said in a statement.
The total delinquency rate for all of Capital One's loans fell to 3.13% in the quarter, down from 3.71% a year ago. Net chargeoffs fell to 2.52%, down from 4.82%.
The company's U.S. cards business, its largest, saw delinquencies drop to 3.65% in the quarter, down from 4.53% a year ago. The net chargeoff rate fell to 3.92% from 8.23%.
While delinquencies are at historic lows for many credit-card lenders, recently monthly numbers show late payments are ticking up at several major companies. If delinquencies continue rising, it could cause an increase in chargeoffs, which would force lenders to sock away more reserves to cover future losses.
American Express Co., which lends mostly to well-heeled customers, said Wednesday it expects delinquencies and chargeoffs to rise back to more seasonally normal levels next year.
