Cap One loans increasingly soured in March
Capital One said that more of its managed loans went sour last month, according to an 8-K filing with the Securities and Exchange Commission.
The credit card issuer reported that its net charge-off rate rose to 4.11 percent to $508.1 million in March, up from a pace of 3.79 percent in February 2008.
Charge-offs are the value of uncollected credit card balances removed from the books and charged against a bank’s loss reserves. The rate is the amount of charge-offs divided by the average outstanding credit card balances owed to the issuer.
The number of cardholders who didn’t pay Capital One back stayed flat. The delinquency rate on loans 30 days or more past due was unchanged at 3.56 percent in March from the prior month, totaling $5.27 billion. The latest result marked a decrease from the $5.32 billion in delinquent loans for February.
Capital One is scheduled to report its earnings results on April 17. Cap One’s announcement could have an impact on more than just company shareholders: Credit card issuers’ earnings can affect the terms and conditions offered to cardholders.